Impact through risk-taking
As a government-owned company, Finnish Industry Investment has a special mandate and follows the Finnish government's ownership steering policies in its operations. The policy objectives are based on the best possible overall social and economic result, which is primarily evaluated on the basis of how the company achieves its service mission and the costs that this incurs. The government's ownership steering policy focuses on increasing ownership value in a sustainable and responsible manner, taking all stakeholders into account.
Alongside profitable operation, we want our operations to have a positive social impact. Our operations must be profitable over the long term, meaning that the real value of the capital invested in the company must increase. The targets set for the company’s impact necessitate a higher level of risk-taking, and the risks taken can affect the company’s profitability.
The impact is made through the indirect effects of private equity and venture capital investment on Finland’s society and economy, such as the growth of companies, the creation of new jobs and preservation of existing jobs, and the renewal of economic structures.
The challenging nature of the business environment has in recent years also been reflected in the Finnish Industry Investment’s financial result. Over the long term, our operations have been profitable.
During Finnish Industry Investment's 20 years of operation:
- The cumulative profit from operations, including the figure for 2015, amounted to €213m. The cumulative total of €655m of investments in Finnish Industry Investment by the Finnish government has grown into €868m of shareholders’ equity.
- The return on investment (internal rate of return, IRR) for the Finnish government, taken over the company’s whole period of operation, has been positive (approx. 3.2% after taxes).
|Key figures||IFRS 2015||IFRS 2014||FAS 2013||FAS 2012||FAS 2011|
|Group's investments and commitments (m€)||768||785||763||719||670|
|No. of portfolio companies, directly and through funds||670||610||517||510||486|
|Consolidated profit/loss (m€)||86||-26||-8||7||-13|
|Shareholder's equity (m€)||868||677||560||567||510|
|New commitments during financial year (m€)||93||82||130||57||78|
|Total governmental equity investments in FII, since 1995 (m€)||655||550||470||470||420|
Economic impacts through capital flows
Finnish Industry Investment has had a considerable impact on the development of the Finnish private equity and venture capital market and on the creation of new funds. Direct economic impacts consist of direct investments and capital calls paid to portfolio companies and funds, payments to suppliers of goods and services, personnel expenses, income taxes paid and investments. The direct economic impacts on stakeholders are illustrated in the table below.
|Capital flows by stakeholder group, € thousands|
|IFRS 2015||IFRS 2014||FAS 2013||FAS 2012||FAS 2011||FAS 2010|
|Portfolio companies||Direct investments paid||24,901||39,049||36,965||24,611||48,036||52,637|
|Repayments of direct investments and sales proceeds||56,024||6,026||7,673||7,594||11,998||3,553|
|Portfolio funds||Capital calls paid to funds||68,335||62,830||43,927||57,513||57,956||60,427|
|Repayments of principle and profit distribution from funds||99,146||60,515||54,406||28,598||40,992||28,078|
|Suppliers of goods and services||Other operating expenses||2,782||2,583||2,563||2,327||2,516||2,461|
|Personnel||Salaries and fees||3,633||3,217||2,855||2,800||2,374||2,386|
|Other personnel expenses||217||155||162||118||114||110|
|Personnel expenses, total||4,418||3,927||3,476||3,389||2,913||2,886|
|Public sector||Direct taxes||2,779||0||0||0||519||20|
|Charitable bodies||Donations given||2||2||2||2||2||4|
|Shareholders||Dividends paid to owners||0||0||0||0||0||0|
|Investments||Investments in tangible and intangible assets||40||69||21||650||67||0|