Evli - pure asset manager

[Sauli_Vilen]

Evli has a long list of minority holdings (2024 annual report page 169 and 171):

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).

[Hermot_Lehman]

There was also a clear cost overrun in group expenses, but in our understanding, this is explained by the company’s 40th anniversary celebrations.

Could you tell us more precisely about how this cost item was formed - personal observations or similar?

[Sauli_Vilen]

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

[TemeMOME]

Time to brew some Evli coffee.

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.

[Portfolio_Manager]

Hi!

1. 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?
2. 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?
3. Anniversary year additional dividend (40V) - could such a thing be coming? Does the company have distributable funds in its balance sheet?

[Vaari-1958]

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.

[Sauli_Vilen]

Hey,

They surely didn’t go into management’s pockets, did they So, the deal in Q3 was that performance fees increased by 10 MEUR, but net profit exceeded expectations by 0.6 MEUR. Let’s find out where this 9.4 MEUR disappeared!

In asset management, other revenue lines were broadly in line, but expenses were 1.4 MEUR higher. Now 8.0 MEUR remaining.

The investment bank’s quarter was very weak, adding another 1.4 MEUR in negative impact from here. Now 6.6 MEUR remaining.

The group’s own balance sheet returns were weak, bringing -0.6 MEUR of bad news from here. 6.0 MEUR remaining.

Group-level expenses were -1.7 MEUR more than expected (mainly 40th-anniversary celebrations). Now 4.3 MEUR remaining.

Minority interest in earnings was over 3 MEUR higher than expected. This was due to performance fees mainly coming from a couple of funds with significant minority ownership (this was discussed a couple of messages ago). When you add a slightly higher tax rate than expected, we arrive at a net profit exceeding forecasts by 0.6 MEUR. So, that 9.4 MEUR didn’t go to management, except perhaps some crumbs as increased bonus provisions

No interpretations should be made from Evli’s guidance. The company usually guides for a profitable result, which is largely a joke, as the company was last unprofitable on an annual basis during the tech bubble hangover in the early 2000s. Even on a quarterly basis, losses have probably only occurred once in its stock market history. Why doesn’t Evli provide more detailed guidance? One reason is that the company’s results are sensitive to capital market movements, which makes forecasting difficult. Another is that the company has clearly chosen a policy of never having to issue a profit warning in any scenario.

In its 30th anniversary year, the company did not distribute an additional dividend, but that option is not entirely ruled out. For example, the company’s balance sheet would certainly allow for a symbolic 40-cent dividend. However, I wouldn’t base an investment case on this.

@Vaari-1958 Over 70% of Evli’s client assets come from Finland, so in this sense, the company is dependent on Finland. However, this capital is invested globally, and Finland’s weight in investments is certainly less than 10%. But of course, client sentiment is also affected by the Helsinki stock exchange’s performance. Many clients, however, have a structural overweight in Finland (direct equities, etc.).

[Sauli_Vilen]

I also simultaneously released the comprehensive report I promised earlier! Evli laaja raportti: Sektorin paalupaikalla - Inderes

In my opinion, Evli is increasingly solidifying its position as the best company in the sector, and the company’s outlook for the coming years is very good. The valuation is not cheap, but still quite tolerable. We will surely describe it in a video at some point, once we have time from the earnings season rush I’d be happy to answer questions if any thoughts arise regarding the report

[Mikael_Maijala]

Here are Sauli’s thoughts on Evli in a video, in addition to the report

Evli: Hyvää ei saa halvalla - Inderes

Topics:
00:00 Introduction
00:35 What makes Evli a top company in the sector?
02:28 Key growth drivers
08:07 Price pressure in traditional asset management
12:30 Corporate arrangements
16:02 Philosophy of financial targets
21:15 Forecasts and valuation
25:02 Good things don’t come cheap

[Cadel]

Pörssi- ja lehdistötiedotteet

Evli Private Capital Makes a Significant Investment in Finnish Growth Company Enico

Evli Private Capital, part of the Evli Group and focused on private equity investments, has, together with Arvo Sijoitusosuuskunta, made a significant seven-million-euro investment in Finnish growth company Enico. Enico offers advanced modular battery-based energy storage systems to companies operating in the commercial, industrial, and energy sectors. The company optimizes electricity storage solutions for both renewable energy producers and users. In this way, the company promotes the green transition and supports the EU’s goals related to reducing carbon dioxide emissions and ensuring energy supply security.

Significant minority investments are made from Evli’s Evli Private Capital Fund I, which focuses on the green transition, into small and medium-sized growth companies that concentrate on energy sector disruption, resource efficiency, and the circular economy. The investment now made supports Enico in accelerating its growth both in the company’s current main market in Finland and in international markets. The investment consists of both new capital and the purchase of existing shares. With the investment, Evli Private Capital becomes a significant minority owner of Enico.

The energy storage markets are expected to grow rapidly as the transition to weather-dependent renewable energy accelerates both in Finland and in Europe. For example, wind and solar power production is weather-dependent, which causes large price fluctuations and makes energy supply more unpredictable. The growth of renewable energy sources also increases the load on the electricity grid and makes the predictability of energy supply more difficult. All of this significantly increases the need for fast and flexible energy storage solutions.

Enico offers modular battery-based energy storage systems (BESS) that help customers improve energy management and gain a competitive advantage from the green transition. The company’s flagship product, Enico | Jupiter, is suitable for various energy storage needs, from small electricity storage units to large, multi-megawatt systems. In addition, with Enico’s AI-based Energy Management System, customers can remotely monitor electricity storage and optimize energy use. The system controls, among other things, energy time-shifting and peak power support, and through its market trading service, electricity storage units also participate in several energy and reserve marketplaces. This helps Enico’s customers maximize the returns from energy storage. With scalable, high-quality products and strong service expertise, Enico helps customers manage the challenges of changing energy markets and supports the transition to cleaner energy by making energy systems more flexible.

Enico employs 23 professionals at its headquarters in Tampere, where the company recently also opened new assembly facilities. The company’s customers include companies operating in the commercial, industrial, and energy sectors, such as Recharge, NREP, and AJ Power, as well as investors, such as New Stars & Company. Currently, Enico operates mainly in Finland, but the company has strong international growth targets, supported by its successful export projects.

Enico, founded in 2019, has significantly grown its revenue since its establishment: Between 2019 and 2024, the average annual growth rate was almost 200 percent. The company estimates it will almost double its previous year’s revenue of 8.9 million euros in the fiscal year 2025. In addition, in October 2025, the company rose to the first place in the “Deloitte Technology Fast 50” listing, which annually recognizes the 50 fastest-growing technology companies in Finland.

[Cadel]

Pörssi- ja lehdistötiedotteet

Evli Short Corporate Bond Fund Became One of Europe’s Largest Corporate Bond Funds

The Evli Short Corporate Bond Fund has reached the 2.3 billion euro assets under management (AUM) mark. The fund is now Finland’s second-largest corporate bond fund investing in Europe, and it is among the most significant corporate bond funds in all of Europe. The fund also has Morningstar’s highest, five-star rating. Evli has attracted a total of one billion euros in new investments to its fixed income funds during the year.

The Evli Short Corporate Bond investment fund primarily invests its assets in short and medium-term bonds issued by European companies and banks. Investments are made in both higher (investment grade) and lower (high yield) credit rating bonds. The fund’s non-euro-denominated investments are hedged against currency risk.

The fund’s portfolio is broadly diversified, and its risk level is moderate. The fund also offers investors access to the Nordic markets, where it currently invests approximately 40 percent of its portfolio. The fund’s objective is to seek a high risk-adjusted return through broad diversification of assets across multiple issuers, sectors, and credit qualities, as well as through active investment policy across different fixed income markets and instruments.

Over the last 10 years, the fund has achieved a cumulative return of 19.45 percent compared to the benchmark index’s 11.50 percent.

[poutapilvia]

Evli +247 million euro net subscriptions from last month Steady performance
Market share gained this year +0.5% and now it is 6.7%.

691329973a73b884bf6d354f_Rahastoraportti_202510.pdf

[Sauli_Vilen]

Here’s my comment on the fund report linked earlier by @poutapilvia. Evli’s strong performance continues and the single-year sales record will most likely be broken

[Sauli_Vilen]

Evli once again performed excellently in SFR’s institutional asset management study. Here is Evli’s own press release: Evli | Evli jälleen kärkisijoilla SFR Researchin yhteisövarainhoidon…

and here is our comment on the study in general: Finanssisektori sijoituskohteena - #831 käyttäjältä Sauli_Vilen

[TemeMOME]

Kotimaiset rahastopääomat lähellä haamurajaa marraskuussa - Inderes

[poutapilvia]

Evli recorded +€112.74 million in net subscriptions for December. The total net for the entire last year is ~€1.7 billion.

Let’s hope for a similar pace this year!

6967780dab4a335f555dd239_Rahastoraportti_202512.pdf

[Sijoittaja-alokas]

Here are Sauli’s advance comments on Evli’s Q4 results, as Evli reports its results on Tuesday.

New sales have continued their excellent development in Q4, and the company’s performance for 2025 is excellent by all metrics. The Q4 result will be very strong, supported by significant performance fees. The focus of the report will be on the outlook for 2026 and the dividend proposal, which we expect to be generous given the company’s strong balance sheet and earnings.

Evli Q4'25 -ennakko: Vahva vuosi saa arvoisensa päätöksen - Inderes

[chekkonen]

It’s a BIG WIN

Evli Oyj: Tilinpäätöstiedote tammi–joulukuu 2025 - Inderes

[Sauli_Vilen]

Indeed, it was a really strong result! Revenue beat estimates significantly (+16%). It is important to note that this came mostly from fund management fees, not performance fees. I do suspect there are some retroactive fees involved, and/or a carry-over from Q3 (Q3 fees were very soft in funds).

Performance fees and brokerage were also a notch better than expected.

Expenses grew slower than revenue as expected, and operating profit beat estimates by 33%. Note: the increase in expenses is explained by the fact that the better-than-expected Q4 result has retrospectively increased the bonus accrual for the entire year. Operating profit also includes a EUR 1.6 million negative result share from an associate. This likely relates to AllShares, but at this stage, I don’t know if it’s an accounting item or if it reflects business development.

The minority interest share was unpleasantly large again, taking a chunk out of the operating profit. I assume that performance fees from certain funds flow through here (minority interests). EPS ended up being 24% above expectations, so overall, this is a very strong performance.

Oh, and sales in Q4 were insanely good and better than expected

Today, for the first time ever, I’ll have CEO Lehtimäki on InderesTV

[TemeMOME]

Time to brew the Evli coffee.

Good job Sauli, glad Maunu is joining for a chat.

Expectations for 2026 are positive

OUTLOOK FOR 2026

The past year was turbulent in the investment markets, and the operating environment is expected to remain uncertain and difficult to predict also in 2026. The expansion of geopolitical risks and concerns about the sustainability of economic growth are increasing uncertainty in the markets. If investor confidence weakens and market values decline, it will have a negative impact on Evli’s fee income and the return on its own investment portfolio.

Despite the challenging operating environment, Evli has succeeded in strengthening its market position. Growth has been supported by a broad product range and customer base. With a strong market position and positive growth outlook, we estimate the operating profit to be clearly positive.