Friends, @Karo_Hamalainen interviewed Petri Niemisvirta from Mandatum.
Mandatum issued a dividend storm warning: The company plans to pay its owners over one billion euros in dividends during the strategy period extending to 2028. This corresponds to two euros per share.
Mandatum’s CEO Petri Niemisvirta emphasizes the word “over” in the target: One billion is the floor. More can be distributed.
*Dividends must indeed be shoveled out generously so that Mandatum can achieve its second financial goal, a return on equity of over 20 percent. *
Dividend distribution capacity is freed up as Mandatum systematically dismantles its traditional core, guaranteed interest rate business. The company closes the earnings gap left by the guaranteed interest rate business by growing other business, which it calls capital-light business.
Mandatum’s strong growth areas are international wealth management, i.e., in practice, selling Mandatum’s investment products to institutional clients outside Finland, and asset management for wealthy Finnish private individuals.
At the grill, Petri Niemisvirta explains how Mandatum aims to achieve its goals.
Mandatum Life Insurance Company Ltd and Pohjantähti Mutual Insurance Company have signed a cooperation agreement on June 17, 2025, through which Pohjantähti will act as Mandatum’s partner in personal insurance offered to private customers and small businesses.
Mandatum’s personal insurance policies for critical illness, short-term and long-term disability, and death will become part of Pohjantähti’s product range starting in September 2025. These insurance policies help secure one’s own and loved ones’ finances or the continuity of a business in challenging health-related situations.
Pohjantähti is a Finnish, customer-owned non-life insurance company founded in 1895, with 111,000 private customers and 16,500 corporate customers. Its distribution network, serving private and corporate customers, covers 30 offices and approximately 20 franchise entrepreneurs, employing 170 insurance agents across Finland.
Mandatum Asset Management’s (MAM) Growth Equity II fund invests in the Nordic data consulting company Epical. The investment supports the company’s goal to grow into the most trusted and innovative data consulting company in the Nordics.
Epical is one of the leading service providers in the Nordic market for companies purely focused on data consulting. Its services and expertise support customers’ data management, utilization, and protection. The company has ten offices in Sweden and Finland and over 400 customers from various industries, including significant clients from both the private and public sectors. Epical’s revenue was 46 million euros in 2024, and it employs approximately 400 digital experts. With this investment, Epical aims to further strengthen its current service offering.
The financing round totals 22.5 million euros. This is a significant step in Epical’s growth story, as the investment enables accelerated growth in the Nordics. Osuuskunta KPY, which currently owns Epical entirely, will continue as Epical’s second main owner after the financing round.
The investment is conditional on regulatory approvals, including from competition authorities.
If one looks at the situation through slightly more cynical glasses, it can also mean that the best returns from the company are already behind. Those best ideas often reflect the short term. In short-term (buy) ideas, positive aspects are usually overemphasized and risks are underestimated. This is completely normal market psychology, and only one player is behind those ideas.
Those who come late to the party often get flat punch.
Referring to the wisdom above: perhaps, but in recent years, one would have certainly done excellently by buying the Mag 7, i.e., exactly what everyone else is buying head over heels, regardless of P/E ratios and other parameters.
Then, when you get analytical and start looking for gems, the market can remain irrational longer than your cash lasts
In my opinion, a good compromise is to look for those gems among somewhat known companies that at least generally belong to an index. I also prefer large companies. A big company is big because it has at least managed to grow. With small companies, you easily get stuck for 10 years if you are not willing to sell at a loss and move on.
Plus, it’s very possible that asset management will start to generate increasingly more, thereby compensating for the shrinking balance sheet. This is even likely if the general economic development improves from here.
Well, this is truly the best dividend stock on the home exchange.
A real Finnish gem in the current global situation.
Many are waiting for an opportunity for additional purchases if the stock markets start correcting from their highs.
I myself have been accumulating Manta from 3.33€ up to 5.8x€ before the dividend was paid out.
I will continue buying at these prices with a smile on my face.
Of course, getting it cheaper is always better.
I’m not entirely sure what you meant by “offsetting the shrinking of the balance sheet”?
The intended improvement in asset management returns is not meant to offset the balance sheet, because asset management is less capital-intensive than old interest-bearing products. Therefore, the balance sheet paid out as dividends will not be offset at all.
One can, of course, hope that asset management returns will be able to generate enough in the future so that EPS does not at least worsen as interest-based commitments decrease.
Well, yeah, that’s probably how it is. I just meant that asset management hopefully starts generating enough so that strong dividends can continue to be paid. Insurance companies and banks are a bit harder for me to understand, even though I have a financial education. But doesn’t that growing revenue stream show up on the balance sheet, even up to dividends?
Normally yes, but Mandatum is an exception right now, paying (if I recall correctly?) a 66-cent dividend from a 34-cent EPS. The excessively high dividend is based on the fact that capital can be distributed to owners as capital-intensive interest-based contracts decrease (no new ones have been sold for years).
Less than half of the EPS now comes from asset management, which is done with light capital, and whose growth Manta aims for. Monitoring the success of this strategy is, in my opinion, a critically important figure to follow in Manta’s earnings reports, and it reflects precisely that growth in revenue stream you mentioned. Over the long term, that revenue stream must compensate for the returns previously generated by gradually phasing out interest-based products.
The unwinding of interest-bearing instruments will take years, so capital-light business has time to develop.
This won’t collapse in a single quarter.
Now they are distributing substantial cash for 3 years.
Then dividends will stabilize at the +40c level for a few years.
At least, this is how current estimates stand.
In my opinion, as a Finnish bond, this is a pretty decent return even so.
Let the company mature in peace.
”Let the company settle in peace.”
I completely agree. I greatly wonder in these discussions about the attitude that no room is given for corporate restructurings, acquisitions of company parts, newly developed products, etc. It feels a bit like people think Mandatum will continue as it is now into the distant future. I don’t believe that myself. Big things are coming in the next few years.
From AMWatch, which follows the Nordic asset management sector, news about international players’ interest in Nordic clients caught my eye again. In this article, British asset manager Impax Asset Management talks about its plans to expand its operations, especially in Denmark (article behind a paywall).
From Mandatum’s perspective, the key takeaway is this: “Impax is hoping to build out its regional presence through a combination of global high-yield and emerging markets corporate bond offerings, along with its long-standing expertise in thematic equities.”
A single case does not, of course, change market dynamics, but the compilation of articles published this summer at the end of the story clearly shows how the Nordic asset management market is seen as very attractive even outside local players:
The tightening of competition and the increase in the number of alternatives is not surprising, of course, as signs of this have been visible for a long time. From Mandatum’s perspective, this further emphasizes the importance of the performance development of key products, as similar funds are becoming available in abundance. On the other hand, now is also a good opportunity to strengthen its position and recognition outside Finland, as many players are just starting their Nordic operations.
Next Thursday, we will get another checkpoint on Mandatum’s international growth progress when the company publishes its Q2 results. Before that, an earnings preview is still to come.
OP moved to a Reduce rating for Mandatum (Add). OP maintains its target price at 5.80 euros.
Following a strong share price increase and the share price exceeding our target price of 5.80 euros, we lower Mandatum’s recommendation to REDUCE (previously ADD). Although we are positive about the company’s asset management business growth prospects and exceptionally substantial dividends are expected in the coming years, the total return potential for future years remains somewhat too low according to our forecasts (~6% per year).
Mandatum was also removed from OP’s Best Picks list on Monday, August 11.
I spotted on Shareville that DNB Carnegie raised the target price to 7 euros and gave a buy recommendation.
