Lego’s billionaire owners should funnel more of their fortunes into projects that try to figure out how to reduce excess plastic in environmentally friendly ways.
Kirkby, the fund that manages nearly $20 billion in assets on behalf of the family behind the toymaker, is looking at at least one new plastic reduction project to invest in this year. It comes after testing the market for the first time in 2020 by buying a stake in Quantafuel AS, a Norwegian company that turns old plastic into energy.
In an interview, chief investment officer Thomas Lau Schleicher singled out plastic waste as a key focus area for the fund. But he said he was also looking forward to ideas like “new technologies to produce plastic alternatives.”
Kirkby Kjeld is headed by Kirk Christiansen, the grandson of the Lego founder and one of the richest men in Denmark, with a net worth of $7.3 billion, according to the Bloomberg Billionaires Index. In recent years, he has given more control of Kirkby to his three children, Agnet Kirk Thingaard, Sophie Kirk Christiansen and Thomas Kirk Christiansen, each of whom has a personal fortune of around $7.1 billion.
The family fund that owns Lego reinforces its commitment to the fight against plastic waste by creating a new portfolio for these investments, called Circular Plastic.
Schleicher says there is no connection between Kirkby’s investments in the region and the use of Lego plastics in its production. The company, which annually manufactures some 100,000 tons of plastic blocks, seeks to develop a product with renewable materials of vegetable origin, such as sugar cane.
Kirkbi’s investment in Quantafuel has already paid off, with the value of his stake nearly doubling from his June investment of around $26 million. Schleicher said Kirkby is willing to support Quantafuel if it needs to raise fresh capital.
Meanwhile, earnings from the fund’s global investments fell 62% last year. This is despite record results from Lego, which generates most of Kirkbi’s revenue. But some of his other big investments lost money. ISS A/S, an office space cleaning service provider, of which Kirkby owns around 17%, fell 34% in 2020.
The fund is now looking to buy more clean assets, amid signs the sector is also generating healthy returns. Kirkby also wants to invest more in solar and wind power, Schleicher says, adding to the $1.3 billion already allocated for the region. But prices rose as more investors took an interest.
Therefore, Kirkby is considering potential investments earlier in the value chain, as it has done with Adapture Renewables, which develops, builds and owns solar cell farms.
“It is often difficult for us to participate in auctions where these farms sell for very high prices,” the CIO said. “A lot of capital is coming into this world right now.”