Tesi manages KRR funds-of-funds, in which both Tesi and Finnish insurance and pension companies invest. KRR funds invest in venture capital and growth funds operating in Finland that invest in Finnish growth companies. An investment in a single portfolio fund ranges between EUR 5 and EUR 30 million, and amounts to at most 40% of the investment commitments in an individual fund.
KRR funds-of-funds have no restrictions on which sectors they invest in. They do not, however, invest in portfolio funds that focus mainly on investing in real estate, listed companies or other funds-of-funds, or in funds that invest in infrastructure projects or infrastructure companies.
Management of KRR funds-of-funds
Tesi Fund Management Oy, Tesi’s subsidiary, manages KRR funds-of-funds and is registered under Finland’s Act on Alternative Investment Fund Managers (162/2014, in Finnish). In making valuations of KRR funds-of-funds, Tesi complies with Invest Europe’s guidelines for valuation, which are based on International Private Equity Valuation Guidelines (IPEV). Invest Europe’s guidelines are also followed for investor reporting.
Tesi, in co-operation with Finnish institutional investors Ilmarinen, Keva, VER, Elo, LähiTapiola and Fennia, has established a new fund-of-funds KRR III. Similarly to its predecessors, KRR III invests in Finnish venture capital and small buyout funds. Its total capital is 150 million euros.
KRR II is a €130m fund-of-funds with a 2014-2017 investment term. KRR II has given commitments amounting to €125,5m to 10 venture capital and small buyout funds.
Along with Tesi, the other co-investors in KRR II are Ilmarinen Mutual Pension Insurance Company, the Local Government Pensions Institution, Elo Mutual Pension Insurance Company and the State Pension Fund.
KRR is a €135m fund-of-funds managed by Tesi. The fund’s investment term ended in December 2013. The fund invested in 11 Finnish venture capital and small buyout funds between 2009 and 2013. The total capital invested in portfolio funds amounts to €835m, of which €230m came from investors abroad.
Along with Tesi, the other co-investors in KRR are Ilmarinen Mutual Pension Insurance Company, the Local Government Pensions Institution, the State Pension Fund, Eläke-Fennia Mutual Insurance Company, Tapiola Mutual Pension Insurance Company, OP Life Assurance Company Ltd, OP-Eläkekassa and Etera Mutual Pension Insurance Company.