This morning, I wrote about the impact of rising interest rates on various asset managers. For eQ, unfortunately, rising interest rates are poison. It is clear that if interest rates remained at a higher level, this would worsen the crisis of open-ended real estate funds. Although eQ’s YKK (capital protected fund) is quite well protected due to its inflation clauses, this also complicates redemption payments there. In addition, for Liikekiinteistö (commercial real estate fund), this increase in interest rates is really bad news and exacerbates the fund’s already difficult situation.
Regarding PE (Private Equity), the concern is mainly focused on performance fees. In my opinion, there is a significant risk that uncertainty will delay underlying exits, which in turn would delay performance fees. In the worst case, rising interest rates would also weaken exit prices => suppressing performance fees. Furthermore, the delay in exits naturally also delays returns, which complicates new sales for PE.
At the same time, it is good to remember that the situation is evolving rapidly. If Trump pushes through some peace deal, interest rates might correct downwards quickly and deal flow might recover rapidly, as it did a year ago after the tariff chaos.
I watched Pölönen’s overview of the general meeting. I recommend it to everyone interested in eQ. These are a rare treat, as for now, they keep their earnings information within a small circle. I personally noted when Pölönen said that both infrastructure and private debt are being investigated. I have argued for a long time that there would be room in the Finnish market for an infrastructure FoF (Fund of Funds) and coming here through a partner would fit eQ’s offering very well. I really like Pölönen’s very direct and extremely determined presentation style. It’s also a refreshing exception to speak so directly about goals (+1e/dividend, etc.).
eQ asked me a while back if I’d like to talk about real estate funds on video with them. I replied that if I could freely choose the topics, I’d be happy to, and now the video seems to be out: eQ - eQ:n kiinteistörahastojen talouskatsaus Q4/2026
In addition to the current situation of the funds, we also discussed the updated rules of the funds, which have also sparked a lot of discussion in the Financial Sector thread.
Interesting interview. Regarding YKK (Yleishyödyllinen kiinteistöosakeyhtiö - Non-profit Real Estate Company), it was stated that the biggest value decreases are in the Helsinki metropolitan area because price points have been found thanks to other transactions. I understood this to mean that the rest of Finland is more or less a guess when it comes to valuation?
For a couple of years, the forum has been wondering about the slight decrease in value of Titanium’s Care Fund compared to eQ’s YKK, and there is a big difference in their geographical distribution. eQ has 60% in the Helsinki metropolitan area and Titanium has 7% (in Uusimaa).
According to the interview, YKK transactions are mainly made in the Helsinki metropolitan area. This is probably why eQ has been able to pay redemptions much better than Titanium.
eQ indeed sought a credit rating for the YKK fund In my opinion, there are two clear angles here:
A credit rating opens access to the bond markets, which in turn reduces reliance on bank financing. In the best case, this could lower financing costs. Domestic banks have been quite reluctant to finance real estate funds in recent years, and thus diversifying financing options is more than smart.
As I understand it, a credit rating is an investment criterion for at least some larger international investors. In addition, a credit rating is also a kind of quality/credibility stamp in international markets.
Considering these points, I consider applying for a credit rating to be well-justified.
Regarding international new sales, however, I still see redemption queues as a key challenge. It’s hard for me to believe that international investors would be willing to put new money into the fund when the purpose of the money is to pay for the redemptions of old owners. This gridlock needs to be resolved somehow, and the rise in interest rates doesn’t exactly make this task any easier.
Interesting discussion. As a curiosity, I think going behind the regulation in defining the risk class is wrong, and they haven’t read the regulation properly.
Group 1 includes the following: […] c) 1) PRIIPs or investments underlying PRIIPs whose value is determined less frequently than once a month or for which there is no appropriate benchmark or proxy, or whose appropriate benchmark or proxy is valued less frequently than once a month.
and:
PRIIPs in Group 1 belong to MRM class 7, with the exception of PRIIPs referred to in point 4(c) of this Annex, which belong to class 6.
For these illiquid assets, the risk class is not calculated based on volatility; rather, it should be class 6 by definition. The same, of course, applies to many other actors. A quick look shows that UB, Titanium, and Ålandsbanken also report class 3 or 4 in the same way, while OP and CapMan funds are specifically in class 6. I didn’t bother to check others. I recall that this regulation changed at some point, and perhaps the differing interpretations stem from that.
Whether that risk class matters to anyone at all is then an entirely different question.
eQ published the fund values for Q1 (monthly overviews will probably be available by the end of the week). YKK is marginally in the green (as it has been for the last two years), but Liike is again showing an ugly almost 3% minus. The situation with Liike is really difficult, as I explained in this message: eQ - Entinen (?) tylsä rahakone - #746 käyttäjältä Sauli_Vilen
Unfortunately, there is a genuine risk that Liike is in a kind of run-off state, with redemptions accumulating, and with that performance history, attracting new investors could be very challenging.
Here is Sale’s preview as eQ reports its Q1 results on Tuesday, April 28.
We do not expect any major surprises in the numbers, and Asset Management’s result continues to decline due to challenges in real estate funds and growth investments. The focus of the report is primarily on the progress of the strategy launched in February and new sales of PE (Private Equity) funds. The realization of performance fees is also under the microscope, as they are a key driver of earnings growth in the short term.
I noticed that eQ has updated its weekly review format to the less frequent eQ Nyt review. Compared to the weekly review, these covered things like the outlook for real estate and private equity more comprehensively, specifically from eQ’s perspective.
For private equity, for instance, the impression was that although the exit market is still quite selective, activity is clearly picking up and exits are being made. In my view, this supports the earlier thesis and analysis that we are moving into a phase where more performance fees will start to be realized.
Could this be interpreted to mean that we would see the first larger spikes in performance fees in the second half of 2026, if realizations continue? Link: eQ - eQ Nyt - huhtikuu 2026
eQ’s Q1 numbers fell marginally short of our forecasts, but this is purely explained by Advium’s weak performance. Asset Management’s figures were well in line with our forecasts and at first glance, the report does not seem to contain any major surprises. Preliminarily, we see only limited need for forecast changes. In the results briefing, the focus is, as usual, on PE new sales, PE performance fees, and challenges in real estate funds.
Sauli has produced a company report on eQ as his evening work.
We are revising our target price for eQ to EUR 10.0 (prev. EUR 11.0), reflecting the lowered forecasts. We still expect a significant earnings turnaround from the company in the coming years, but the uncertainty related to the turnaround remains high and the turnaround is weighted towards the end of the strategy period extending to 2030. The stock’s valuation level leaves no room for disappointment, and due to the uncertainty related to earnings growth, taking a risk at the current price is not attractive. We are therefore reiterating our reduce recommendation and await concrete signs of earnings growth starting.
A quite interesting new product from ICECAPITAL. In this case, the Seafarers’ Pension Fund is transferring its direct real estate holdings into an indirect fund format. eQ has been talking about these types of products/arrangements for a long time, and we believe it is clear that eQ is also pursuing similar opportunities.
Today we’re making a bit of history as eQ joins our investor event for the first time in our ~11-year coverage! The company is at a clear turning point as it tries to pivot back to brisk growth after several difficult years. If you have any questions for management, you can post them here or send them to me privately.
The Asset Management evening kicks off today at 16:00 with my presentation, followed by Aktia, Alexandria, and eQ on stage. Welcome to the stream: Varainhoitoilta 18.5.2026 - Inderes
Here are Kasperi’s comments regarding eQ’s implementation of the refinancing packages for its real estate funds.
Although the new financing package naturally does not lower the funds’ leverage, the extended maturity provides the portfolio management with peace of mind to operate.
Pertti Vanhanen, who serves as the Director, International Business at eQ Group and as a member of the Management Team, also appears to have purchased ~€100k worth of EQ shares at the end of June, according to official communications.
eQ announced that both its Care Properties (Yhteiskuntakiinteistöt) and Commercial Properties (Liikekiinteistöt) funds will remain closed to new redemptions. However, the clearing of previous redemptions is proceeding in stages. The remaining redemptions from the Care Properties’ June 30, 2025, window are now being paid out. This means redemptions for the next two windows (H2’25 and H1’26) are still outstanding.
Commercial Properties is now paying out 60% of redemptions from the H1’24 window. 40% of redemptions from this window, as well as subsequent redemption windows, remain unpaid, so the situation for Commercial Properties is clearly more difficult than for Care Properties.
