Yes - In my eyes, an incredibly blind investment in the Real Estate segment and a clear failure in raising new funds could be behind this. I will continue to wait for investment in core competencies: Energy + Garantia (a spinoff or even a corporate restructuring as an additional option, of course), whose track record and team expertise are top-notch. Cut the deadwood and focus on the elements that work.
EDIT. I thought that new CMD and strategy creation was a joke, but you see all sorts of things when you get old.
Iâm not sure if this has been mentioned in this thread, but I came across some interesting information when I had mortgage negotiations a couple of weeks ago. Danske Bank (which at least some years ago had the third largest mortgage portfolio in Finland) no longer uses Garantia for purchased collateral but has switched providers. Garantia was in use at least ~5 years ago, when I last bought a home. A quick Google search from June 2024 found at least a mention of another provider (Suomen Vahinkovakuutus).
One could assume that the withdrawal of a company the size of Danske has caused at least some impact on Garantiaâs results and will probably continue to do so.
Taaleri is in a slight dip on the stock exchange today (-5%), which made me quickly check whatâs happening with the company. Things that caught my eye:
EV/EBIT for the coming years = 6
'25e P/B ~1
Long-term average ROI perhaps around 13-15%
From the comprehensive report (2023):
âUsing our valuation methods, we get the value of Garantiaâs share capital as EUR 180 millionâ
The companyâs enterprise value at the current share price is EUR 204 million. So, by buying Taaleri at the current share price, you get the insurance company Garantia and all other business operations for EUR 20 million.
Tell me, oh Taaleri-experts, why isnât the entire Inderes forum buying this with both hands? Do one-off revenues explain the lionâs share of the result, and therefore the company is seemingly cheap?
@Kasper_Mellas has prepared a new comprehensive report on Taaleri, which is naturally available for everyone to read, like all other comprehensive reports, meaning there are no paywalls.
Taaleriâs focus in the coming years is on ramping up Capital Funds and on bioindustry investments in its own balance sheet. The Groupâs result, however, still relies heavily on one-off revenues, but the profitability of continuous operations should also gradually improve as new fund launches and assets under management grow. The share valuation is clearly below the value of the Groupâs parts, so we see the return expectation as attractive despite the modest earnings growth outlook for the coming years. However, in our assessment, the realization of value is subordinate to the return of general risk appetite in the market, in the absence of clear short-term earnings growth drivers.
*In the slightly longer term, Taaleriâs earnings development will be determined by familiar components. We expect assets under management to continue stable development, although with the SolarWind 4 fund, the natural maximum size of the solar wind fund should gradually be reached, which limits our long-term growth assumptions in our forecasts.
Even though the growth of assets under management should increase earnings from recurring fees, the importance of investment returns will remain very significant in the future. This underscores Taaleriâs relatively high-risk profile.*
I am not a Taaleri expert, but letâs comment on some perspectives:
Bio-funds certainly have potential. High risk, high reward. Time will tell, but these have the potential to raise money for bio-infrastructure funds, to use a fitting metaphor, like digging peat (i.e., in large quantities and easily).
Taaleri has many moving parts, and according to Inderes, for example, SOTP > share price. The industry is also ripe for consolidation. Björn Wahlroos or Warren Buffet would presumably conjure up good returns from this. Unfortunately, potential doesnât help if it canât be utilized.
The CEO got fired â what will be revealed from that? Does the successor want to blame the old one for write-downs, etc.?
The new CEO has never been a CEO before. No track record, no experience. Taaleri would need a vision. Ilkka Laurila may have all the vision in the world, but I, for one, have no idea about his skills.
There are many moving parts here â CMD and strategy refinement are coming. What else will come from that?
There is tough competition in real estate funds, yet investments are forcibly made there without any competitive advantages.
Garantia represents most of the value and theoretically provides steady cash flow. Someone mentioned earlier that Danske might have joined competitors? Furthermore, all matters related to housing/real estate have been in quite a turmoil after interest rates rose by several percentage points following twenty years of zero interest rates. Inderes has raised guarantee risks as a concern. I donât know if itâs those, or competition, or what, but this isnât automatic money for Taaleriâs coffers either.
In private equity funds, Inderes seems to have valued energy funds with quite high multiples. If you add a bit of a safety margin to that, another slice disappears from the groupâs SOTP calculation.
Private equity funds are a scale business; fixed costs are fixed to some extent, and a sufficient mass is needed for revenues > costs, after which AuM growth nicely flows into profit. Taaleri certainly has expertise, for example, in renewable energy, but the competition is tough! Blackrock, Capman, Nordea are there attracting capital with a larger scale and comprehensive solutions. For example, the table in the comprehensive report shows how even just Finnish peers have achieved better ROE than Taaleri, and the competition is quite global.
Taaleri has its own niche with bio-infrastructure funds and renewable energies, but quite little profit remains from these after costs. The assumption is that AuM will grow and then profits will grow, but what if they donât? The easiest thing would probably be to sell other operations and leave only Garantia, but an investment cannot be based on such a solution.
Keva and Taaleri establish a joint venture investing in build-to-rent apartments
Taaleri Real Estate (Taaleri Kiinteistöt) and Finlandâs largest pension insurer Keva have established a joint venture with the goal of investing a total of 300 million euros in high-quality build-to-rent apartment properties in Finnish growth centers.
Taaleri Real Estate (Taaleri Kiinteistöt) is responsible for real estate acquisitions, development, and property management within the joint venture. Taaleri Real Estate (Taaleri Kiinteistöt) has already mapped potential investment targets and is actively seeking build-to-rent apartment properties for acquisition in accordance with the investment strategy. The properties are located in central areas with good transport connections in the Helsinki metropolitan area, Tampere, and Turku.
The joint ventureâs projects adhere to Kevaâs responsible investment principles, which emphasize the energy efficiency of properties and the climate impacts of property energy production for direct real estate investments.
Nordeaâs analysis at least gave a green light to this Keva cooperation, I guess I have to see it that way myself, the main thing is that there is effort. I myself have hoped for a bigger push into electricity storage now that the balancing and reserve market needs capacity. Money will certainly be poured into it, but I guess electricity storage can also generate profit, this is just a gut feeling.
Taaleri was no longer visible among the top hundred in Aktiaâs ownership list; in December, it was still in 23rd place with a good 329,000 shares, meaning it was likely sold during January. From those, probably over 3 million in funds were released. I canât interpret it any further myself; I just wanted to inform followers in case they hadnât noticed.
Taaleri SolarWind III Fund Invests in 129-Megawatt Solar Energy Project in Finland
The Taaleri SolarWind III fund has invested in the Hallanvahti solar energy project, located in Joroinen, approximately 300 kilometers northeast of Helsinki.
The project has all necessary permits, and its construction has begun. The Hallanvahti solar power plant will consist of bifacial panels and sun-tracking mounts, and it is expected to start electricity production in mid-2026. The solar power plantâs annual electricity production will be approximately 140 gigawatt-hours, and the renewable energy it produces will enable an annual reduction of approximately 29,300 tons of greenhouse gas emissions. Once completed, the solar power plant will produce renewable energy for 18,000 households.
In June 2024, the Hallanvahti solar energy project received an investment grant of approximately 17 million euros from the Ministry of Economic Affairs and Employment, covering a maximum of 20% of the actual construction costs. The remaining construction costs will be financed by equity and debt.
The fundâs investment activities are supported by the European Union through the InvestEU Fund.
Probably this cooperation will go to the Mandates line, but thereâs no full certainty. Weâll see next Wednesday. In any case, this is an important breakthrough for Taaleri in real estate, where sales have been bone-dry for a long time.
Could we ask the new CEO about the share buyback, as that authorization has not been used yet, at least not like last year? I was somewhat expecting it to be used in the autumn.
Taaleri announced a clearly better-than-expected result this morning, driven by a one-time gain from Renewable Energy. Operationally, the figures were in line with our forecasts. The company opened its outlook exceptionally clearly, and the prospects appear to be well in line with our previous forecasts. Overall, the report leans towards the positive side. The morningâs earnings live broadcast can be viewed from the accompanying link and Taaleriâs earnings info can be followed from 11:00 AM onwards here.
00:00 New CEO
03:23 Q4â24
04:11 Full year 2024
05:31 SolarWind3 fund sales pipeline
07:45 Kevaâs 300 MEUR mandate
09:31 New products in bioindustry
11:25 Fintoil and other references
13:00 Own balance sheet investments
15:40 Garantia
17:11 Strategy under review
And here comes the new company report on Taaleri by Sale.
Affordable, but âvalue realizationâ might take time.
We reiterate our 9.0 euro target price and âaddâ recommendation for Taaleri. The Q4 report was better than our expectations, but forecast changes have remained limited. Taaleriâs focus in the coming years is on scaling up Capital Funds and on its own balance sheetâs bioindustry investments. The stockâs valuation is clearly below our sum-of-the-parts calculation, and the stock is also absolutely affordable. However, we do not see clear drivers for value realization in the short term, as bioindustry investments are a key value driver for the coming years, and consequently, our own target price is also below the sum-of-the-parts value.
