Investments in funds, Investments in companies, Impact - 25.3.2014
In terms of investment activity, 2013 was a relatively good year for Finnish Industry Investment (FII). FII made new investments and commitments amounting to €130 million, including a €60 million commitment to FoF Growth II. In a challenging economic situation the result of the financial year was € -7.6 million. At the end of the year, FII's investments and commitments amounted to €793 million.
Venture capital and private equity play an increasingly important role in stimulating the economy and fostering growth in Finland. Promising signs of economic renewal could be seen in 2013, as total investment in early-stage and growth-stage companies increased from recent years. According to FVCA statistics, Finnish companies raised €790 million of venture capital and private equity in 2013, which is significantly more than the previous year. Investment volumes grew particularly in early-stage and growth-stage companies.
FII screened some 250 projects seeking funding during the year. New investments amounted to €130 million. FII made new commitments to six risk capital funds totaling €93 million. Commitments were given to three venture capital funds and two buyout funds. The largest commitment, €60 million, was given to the newly-established FoF Growth II. New direct investments, focusing on internationalising technology companies, amounted to €33.1 million.
FII’s financial result for the year was €-7.6m (€7.3m profit in 2012). Income from funds increased compared to 2012, but there were more write-downs in the value of investments. Despite the financial losses in recent years, FII’s operations have been profitable in the long term. The Finnish government’s €470 million investments in FII have grown into €560 million in equity.
”FII channels risk capital to growth companies throughout economic cycles. With fund investments, we develop the Finnish risk capital market and enhance its internationalisation. Syndicated investments made together with private co-investors catalyse other investments into portfolio companies and bring expertise and networks from investors. In 2014, our target is to invest €80 million in risk capital funds and directly in growth companies,” says FII’s President & CEO Juha Marjosola.
FoF Growth II was launched in early 2014. FoF Growth II will invest in approximately 10 Finnish venture capital and small buyout funds, which in turn will invest in about 100 growth companies. The total capital of FoF Growth II is €130 million. In addition to FII, investors include Finnish pension funds Ilmarinen, Keva, Elo and State Pension Fund. Based on FoF Growth I, the total value of the portfolio funds can reach €1 billion.
At the end of 2013 the special law governing FII’s operations was amended. The amendment entered into force on 15 January 2014 and provides for a decree, entering into force on 1st February 2014, to replace the government decision setting policy guidelines for investment activities. The amendment broadens FII’s operating scope. In addition to private equity and venture capital investment, the company can invest in projects that promote the Finnish government’s industrial policy.
On 21 March 2014 FII’s Annual General Meeting appointed the Board of Directors. The Board of Directors comprises Jukka Alho as Chairman of the Board, Urpo Hautala (Financial Councellor, Ministry of Finance), Esa Lager, Inka Mero (Chairman, KoppiCatch Oy), Mika Niemelä (CFO, Ministry of Employment and the Economy), Annamarja Paloheimo (Senior Vice President, Finnvera Oyj) and Riitta Tiuraniemi. The AGM also decided on a €30 million increase in FII’s share capital for FoF Growth II.
FII’s financial statements, impact report and corporate responsibility report are published on http://annualreport2013.industryinvestment.com
For further information, please contact:
Juha Marjosola, President & CEO, Finnish Industry Investment Ltd
tel: +358 9 6803 6811, e-mail: email@example.com
Finnish Industry Investment Ltd is a government-owned investment company that promotes Finnish business, employment and economic growth through venture capital and private equity investments. Finnish Industry Investment invests in companies both directly and through private equity funds, together with and on the same terms as private investors. With 895 million euros in assets under management, the company is currently an investor, directly and through funds, in altogether 510 companies. For more information, please visit www.industryinvestment.com, and follow @TesiFII.