Of course, you cannot compare the past and the future. What you can and should follow are the AUMs (Assets Under Management), and their history looks bright. There is nothing negative there, even though there can and should be fluctuation in a healthy market as the underlying market evolves. That is where the bread is intended to be brought to the table, even if alongside that, the technical interest rate reserve is being run down and excess capital is being returned to shareholders over the next +15 years. And Mandatum will surely fare well even in rising interest rates, and as they said at the AGM pre-party, you need to have chips to play even during a downturn. Even this year, they have already put chips in when blood was almost flowing in the markets. More positive than negative, in both turns for Mandatum. Not all AUM money escapes immediately in a downturn; some is locked in tighter, so those fees keep flowing in even if AUMs were to drop momentarily. And it’s worth re-emphasizing the winding down of the technical interest rate reserve; even as it decreases, there is plenty left to distribute for a very long time when calculated by the standards of quarterly economics. And the growth—it is being pursued sensibly, without setting up massive, lavish offices. With small new personnel costs, one can and should capture a significant share of the new financial market.
It would be interesting to hear perspectives here on why you are investing in Mandatum instead of, for example, the rest of the Finnish asset management market. Mandatum’s valuation has not been coming down for years, whereas the valuations of other asset management companies have been decreasing year after year while they generate better returns on capital. Wouldn’t the rest of the asset management market as a whole be lower risk and offer a better expected return?
Mandatum signals that it is an exceptionally good asset manager, or better than others, and apparently, this holds some credibility in the eyes of many.
At least for my part, the CEO’s answers in interviews and the company’s investor communications in general have been credible.
I am following with interest how they succeed outside of Finland, where more resources have now been allocated even though Finland is still the most significant market. So far, the track record is good enough for me to be involved in this.
Initially, I got in because of the Sampo demerger. Then I added more when it was known there would be “forced selling” / the price would drop, as certain funds couldn’t hold it in their portfolios due to their own rules. As I started following the story and management, while occasionally picking up profits (even luckily at times), my Mandatum position has just kept growing. The latest lucky break was when I emptied my own portfolio just before Altor’s exit, and then I was able to pick it up lower and increase my position. Well, of course, it’s in the red now, but time will tell. From tomorrow onwards, I can add more again, so it doesn’t matter if the market tanks—it’s even desirable 
Somehow other asset management in Finland seems to be stagnating or regressing. Only Nordea is a favorite alongside Manta.
From the intro:
“Asset manager Mandatum’s share price performance follows the company’s profit distribution like a shark follows a ship. It is also not quite everyday that target prices drop solely because of the dividend detachment (ex-dividend date).”
Arvopaperi also finds it unusual that for Mandatum’s share price, the dividend defines the target price and the subsequent drop in target prices.
Mandatum’s “snack list” includes Capman, United Bankers, and Taaleri Energia. However, the premium for the sellers could be so large that it might not be worth it (?), and Taaleri’s energy business would likely also be coveted by players in the energy sector. On the other hand, an acquisition from abroad is a strong alternative, but what about staff retention in the target company?
So, an acquisition is anything but a certainty, but the option does exist.
It is somehow still frustrating to follow Mandatum’s dawdling; no significant deals have been made over the past 20 years.
The problem with consolidation in the asset management sector is the lack of capital; companies are often lightly capitalized, with the majority of earnings going toward dividends. For decades, Mandatum has been in a situation where freed-up capital has simply been returned to shareholders… meaning the competitive advantage for M&A has not been utilized. It is hard to believe anything will change with the current management’s foot-dragging.
As Mandatum’s management has stated, it is not necessarily sensible to buy something in Finland, and their expansion abroad has also been carried out sensibly. There is no point in setting up a mega-office in Central Europe; it is better to first build a customer base through agents operating there. There are too many examples in Finland of how owners’ money is wasted… I appreciate the current business model, and in the autumn, they promised to share how the conquest of Europe is progressing.
I intended to respond to this earlier with a Buffett quote: “The stock market is a device for transferring money from the impatient to the patient.” It doesn’t quite fit since the post mentions a 20-year horizon, so I’ve been reflecting on that. The point I’m considering remains, however: the most important task of management is capital allocation. Now that we’re talking about 20 years, Mandatum has been under Sampo for most of that time, and they’ve surely done what the owner and its management have dictated. I still personally consider Mandatum to be a sort of favorite child of Nalle [Björn Wahlroos]. Insurance funds are pumped, in Buffett-esque fashion, into profitable business operations. They have selected certain profitable businesses that, with great certainty, churn out money year after year regardless of the economic cycle. I believe, and also personally hope, that this strict policy of selecting excellent businesses continues and that they only allocate that money elsewhere once the opportunity is right—meaning the business is right and the price is right. In Nalle’s book, it’s mentioned that Berkshire was at one time interested in, or at least in contact about, buying Sampo. The business might have been right there, but the price wasn’t, and the deal fell through. There may have been various arrangements in the background, but not everything reaches the finish line.
Nordea is significantly lowering its price target for Mandatum shares to €4.80. Recommendation: sell.
As far as I’m concerned, the price can drop to that level. I’ll gladly buy more because of the high dividends. There will be enough of them for many years to come. If the price is 4.80 and the dividend is 0.85, that’s an 18% dividend yield.
Interesting. According to Inderes’ forecasts, dividends of €2.41 are expected in the coming years, and EPS is set to rise above €0.30. At least in my opinion, €4.80 would be relatively cheap for such earnings and dividend payouts.
Yeah, 0.85-0.57-0.56-0.43 (2026e-2029e) is still quite moderate, given that the CEO said there’s enough of the old surplus to distribute until 2035 or 2040. Next year, that larger dividend will likely be explained by the sale of Saxo as well—I think it was around 20c from that, if I calculated correctly back then (and if I remember correctly; I didn’t feel like recalculating it again).
This dividend reinvestment strategy I’ve chosen, based on a single dividend machine and leveraging the compound interest effect, is a bit boring, so I’m trying to motivate myself by researching my investment and speculating irresponsibly.
Nordea and Mandatum operate in the same Nordic financial ecosystem, so what conclusions can be drawn from Nordea’s earnings report while waiting for Mandatum’s upcoming Q2 report, hopefully without comparing apples and oranges?
On May 8th, I wrote that Mandatum’s bond portfolio had taken a hit from the sharp decline in market values during Q1. Nordea’s net interest income remained strong during Q2, so one could think that the recurring interest income received by Mandatum has also stabilized at a high level, which brings stability to the net financial result, now that the accounting changes (IFRS 17) have been implemented. I estimate the net financial result will return to positive territory, around €15–30 million, depending on the portfolio allocation.
The most important figure for the dividend story—and for my investment—is organic capital generation. In Q1, it felt soft, but upon closer inspection, it was a strong €0.10 per share, significantly exceeding the reported earnings (-€0.02). Nordea reported that its solvency remained at a strong level and emphasized that its robust earnings performance supported the organic strengthening of solvency, despite the bank distributing capital through dividends and share buybacks. Mandatum’s organic capital generation follows the same logic. When the Nordic financial sector produces stable core earnings, as shown by Nordea, without credit losses, it could mean that no external macro factors have come to erode the core profitability of financial companies during April–June.
If Mandatum’s net financial result normalizes in Q2, organic capital generation will also gain momentum, which could slowly cement the promise of a large dividend in the spring of 2027.
A positive takeaway from Nordea’s report was the development of assets under management (AuM). Nordea reported that demand for investment and savings products has remained good. For Mandatum, one could speculate that this is direct confirmation that the market environment favored asset managers from April to June and that fee income from Mandatum’s core business will be on a stable footing in the Q2 report.
Nordea’s credit losses remained at a very low level. Perhaps we won’t see any surprising credit losses or write-downs in Mandatum’s balance sheet investments or the corporate loan products it offers either.
I am awaiting the Q2 report with confidence.
Listening to Petri’s Q1 review, the phrase “the situation has changed” stuck with me. By this, he meant the general Iran drop. Q2 will be a good report, but the most important driver is the progress of the asset-light business. Even if they make a +55 million profit and the stock price reacts positively, this is what I am focused on.
My own investments, for example, fluctuate from one quarter to the next and can show -20 million and in the next quarter +20 million, as they are extremely illiquid shares. It doesn’t affect cash flow or dividends, but it makes the quarterly earnings look uglier or prettier.
SEB raised its target price to 6.20 euros yesterday with a buy rating. Since then, the share price has risen by several percent, and today it traded above 6 euros. Could Altor be looking to sell the rest of its shares, with SEB handling the trades once again?
Mandatum’s Q2 earnings report comes out on Thursday, here is a preview:
There won’t be a live earnings stream this time, with the excuse being a double earnings day and a newborn baby. We’ll be back to our live sessions next quarter 
Congratulations on the new baby. It’s a wonderful time in life, and even time hasn’t faded those memories.
As for the forecasts, I am on the same page regarding the development of AUM (Assets Under Management) when comparing this to the market in general. Competitors have seen similar AUM trends, and I would be surprised if Mandatum fell behind others here, especially since they have one of the best interest-rate products on the market.
Predicting the rest of the earnings, however, is a degree more difficult.
I looked at the recommendations and target prices for the stock from different firms, and there is certainly no common thread.
I also understand the pessimism (Nordea, Inderes) from the perspective of whether the performance fees from the service business will be able to replace the investment income from the shrinking balance sheet. In fact, if the company wants to maintain its high-profile status as a dividend stock, the commission income would need to significantly exceed the current earnings.
The equation is challenging, and although the company has been moving purposefully in the right direction, I understand why some analysts are cautious about it. Others have a clear view that Mandatum will succeed excellently in this transition.
When the range is 5.50 - 7.10 (OP), it tells you nothing other than that the numbers are very difficult to predict. Macroeconomic variables hover over all of this, and they can swing the figures sharply up or down.
On the other hand, it is difficult to follow a company in a transition phase with quarterly precision, but that is how the market economy works. For companies undergoing change, the investment horizon should be at least 5 years.