Again, the annual Stock Investor’s Week program has been published, and this time, Evli is not on stage either.
The company’s management last appeared in an Inderes format in 2022
Humble request to @Sauli_Vilen: Next time you meet with Maunu/Evli IR, could you humbly go with a bouquet of flowers and ask if the management would like to come and provide an update at some event? In my opinion, good IR communication nowadays includes management appearing elsewhere than just in boardrooms. Even access to the quarterly reports webcast is only available if you register in advance
Evli’s strong sales in the early part of the year continued, and the company raised subscriptions of EUR 50 million in August. For the entire year-to-date, subscriptions now total nearly EUR 500 million, and Evli, measured by net subscriptions for the whole year-to-date, is a clear success in the sector along with Mandatum. However, we note that Evli Likvidi has grown by over EUR 330 million during the review period, and this somewhat weakens the success of new sales. Part of Likvidi’s growth is, in our estimation, due to the company’s allocation decisions.
Now I can’t think of anything else to say but “NOW THERE WAS A SHOCKER!”
Evli had absolutely massive sales in September. Although this can partly be explained by their own allocation decisions, the numbers are impressive nevertheless
The fund report directly shows that Evli has transferred capital from certain Factor Funds to those Enhanced ETFs (background here https://www.evli.com/artikkelit/evli-lanseeraa-kaksi-uutta-enhanced-rahastoa). Additionally, I suspect that Evli has made transfers from regular ETFs to these in at least some allocation portfolios. To put it simply: Let’s say you had a full discretionary wealth management portfolio with Evli, and that fund had a USA ETF with a 20% weighting. Now I consider it possible that Evli has replaced this USA ETF with its own Enhanced ETF in at least some portfolios. I can’t possibly believe that they would have received such amounts of new capital in the last week of the month. Practically, the only possibility would be that these products have been tailored for a really large investor (a pension company or similar) who has invested large sums of capital into them. If my guess is correct, then Evli’s net AUM will not grow with this move. However, Evli’s earnings may increase because Evli receives significantly more fees from these ETFs than from basic ETFs. IF the capital were new and came from some pension giant, then that entity would certainly not pay list prices, and Evli would only receive marginal compensation for this new capital. Well, we’ll be wiser in 2 weeks, but anyway, this is positive for Evli, and the sales machine is rolling nicely right now
Here are Sale’s preliminary comments as Evli releases its Q3 results next Friday.
The company has been an absolute success story in the sector for the entire year, and positive development has continued in Q3 as well. The company’s earnings are finally turning to strong growth after more than a year of stagnation. We have made marginal positive revisions to our forecasts due to strong sales and positive capital market developments. We will exceptionally write a quick comment on Evli on Friday and will not publish a separate earnings update, as we will release a comprehensive analysis at the beginning of next week.
Evli issues a positive profit warning in connection with its interim report (= we estimate the operating profit to be clearly positive and to exceed the comparable level of the previous year)
Evli Plc’s Interim Report January-September 2025
October 24, 2025 at 14:00
EXCELLENT THIRD QUARTER – ASSETS UNDER MANAGEMENT EXCEEDED EUR 20 BILLION
Highlights of the period
Assets under management reached a new ten-billion-euro level and amounted to EUR 20.8 billion.
International sales boosted the sales of traditional investment funds. Net subscriptions from foreign clients to traditional investment funds amounted to EUR 737 million since the beginning of the year.
Performance-related fees amounted to EUR 12.7 million during the period, of which a record EUR 12 million was accrued in the third quarter.
Despite the challenging operating environment, Evli has succeeded in strengthening its market position. Growth has been supported by a broad product portfolio and client base. Due to its strong market position, favorable earnings development in the early part of the year, and growth prospects, we estimate the operating profit to be clearly positive and to exceed the comparable level of the previous year (EUR 43.3 million).
Previously we estimated the operating profit to be clearly positive.
I’ll get the comment out later tonight, but don’t get too excited about that operating profit! It comes practically entirely from performance fees, and a significant portion of this also flowed to minorities. Regarding EPS, the beat is only one cent. Additionally, the mix of fees looks softer than I had expected, at least at first glance. Yeah, it was a good quarter, but not quite as good as the numbers initially suggest
I haven’t delved deeply into the company beyond the figures, so what are these mysterious minorities that eat into the profit? Why are their stakes reflected in Evli’s results if Evli doesn’t fully own the profit itself? And why doesn’t Evli acquire these ‘stakes’ entirely for itself if there’s surplus cash?
Now I finally got the “quick comment” out. What a report it was. I have to say, I don’t immediately recall the last time a report was this two-sided. The top line was indeed insane due to performance fees, but this entire beat practically disappeared into costs. Sales were historically good, however, and the outlook is also favorable. On the other hand, recurring fees were very soft. There’s a lot to chew on for the weekend
Why do these minority holdings exist then? The common denominator, of course, is the desire to retain key personnel. For example, almost all alternative products include a minority holding, meaning the team/team management of the new alternative area has received ownership in the company as part of their total compensation. Zenito, which performed brilliantly this quarter, has a 35% minority ownership (likely a condition for the deal made a couple of years ago), and the Frontier fund is managed by Terra Nova Partners (minority stake of almost 50%).
In the industry, there’s an eternal question of what’s the best way to retain personnel. Some companies believe in minority holdings (e.g., CapMan), while others handle incentivization entirely through the group (eQ).
No particular observations, as I wasn’t among the invited
I dug up old notes and the 30th birthday party held in 2015 cost \~1 MEUR. Taaleri held its 10th anniversary party in 2017 and if I recall correctly, it cost around \~700 tEUR. Extra costs compared to my Excel are something like 1-1.5 MEUR, so that’s probably a good guess for the party’s price tag
I myself was huffing and puffing over the report yesterday, wondering what on earth was happening here. Well, when I noticed that Sauli’s comments would be out in the evening, I decided I had to wait for them. However, all in all, things are going well for Evli. To quote Sauli, with this outlook, it’s great to head into the end of the year.
Outlook a notch more positive than expected
Regarding the outlook, the company refined its overly cautious guidance. The company still expects its result to be positive and, in addition, for its comparable operating profit to exceed the 2024 level (EUR 43.3 million). For the first three quarters, the company has accumulated EUR 40.5 million, and thus the guidance will be easily met. The company’s comments on the market situation were again slightly more positive, and generally speaking, the company saw the market situation and customer sentiment as good. It’s easy to agree with this, and in our opinion, the sentiment in the Finnish investment services market has clearly improved over the last 6 months, as geopolitical risks have remained under control and the Helsinki Stock Exchange has also been invited to join the global bull market.
This might seem like a provocative question, but I suppose one can ask if the management is now taking the profits as bonuses for themselves, leaving the owners empty-handed?
I interpreted from the Q3 report, when comparing the realized figures and EVL’s year-end predictive guidance, that sales and profit will not be a positive surprise, but might even be dismal in Q4. Do you agree?
Anniversary year additional dividend (40V) - could such a thing be coming? Does the company have distributable funds in its balance sheet?
Evli is, of course, almost entirely dependent on the recovery of the domestic market for its results. I looked at the performance development of many funds and it’s clear how Finland belongs to the Baltic group, with stock prices recovering about a year behind the rest of Europe. The most unfortunate thing about this is that if a setback comes from the wider world next year, we will be back at square one. Finland will not swim against the current for long.
