However, it does leave a bit of an impression that the strategy has been communicated in a way that somehow explains the decisions already made by the company – not the other way around, where a clear strategy guides operations. For example, it’s said that Taaleri focuses on a few megatrends, one of which is urbanization, and because Garantia offers mortgage guarantees, lo and behold, that’s strategic activity! Never mind that Garantia also offers corporate loan guarantees, which are not related to these megatrends in any way.
The CEO praised the development of recurring revenues, but it hasn’t been dazzling at all, and in addition to revenues, profitability should also be examined. So far, one of Taaleri’s problems has been that personnel costs have eroded it, meaning volume growth and scalability would be needed, which, of course, is being aimed for.
It’s positive that those who invested in previous SolarWinds have often been willing to invest in new funds as well. When new investors are then brought in on top of this old base, growth can be achieved.
Eden Asunnot invests in a residential property to be built in Kivenlahti, Espoo. Eden Asunnot will construct an apartment building with 42 high-quality rental apartments. Apartment sizes range from studios to family homes, and a cooling system enhances living comfort. Additionally, the property will feature a rooftop garden and a rooftop sauna.
The apartment building will be located along good public transport connections, near the Kivenlahti metro station. It is an A-energy class apartment building compliant with the EU taxonomy. The property will seek a BREEAM In Use environmental certificate.
Construction of the property will begin immediately, and it will be built by Fira Rakennus Oy.
@Sauli_Vilen by the way, do we have any idea how many million dollars the expected performance fees from old renewable exits, anticipated next year, could be?
Will it be negligible (go into rounding errors) or will a 200M market value already start to have significant cash flow?
Are the performance fees already recorded based on equity performance, so that a good estimate could be obtained from them? The final price, of course, will only be known once they are sold.
Good question, to which there isn’t a simple answer! Since performance fees come from many different sources and some have already been booked in advance, I will itemize these sources separately
Old wind funds (2&3). Taaleri recorded performance fees of approximately EUR 15 million from these funds in previous years, as the funds prepared for divestments and returns were sufficiently above target levels. The company has emphasized in its communication that the bookings were made with large safety margins, and my own feeling has been that the safety margin would be around 50%. The divestments of the funds have been delayed as electricity prices have been so weak in Finland. At the time of sale, there might still be some additional performance fees, but the most important thing, of course, is that the EUR 15 million converts into hard cash (currently just excel money). Most recently, in the Q2 results info, Ilkka assured that the performance fees are “safe” and have been tested for write-downs ( Taaleri Q2'25: ”Positiivinen kvartaali” - Inderes ).
In Q4’24, Taaleri recorded approximately EUR 2 million in performance fees from the Aurinkotuuli1 fund for the first time. The fund has not yet divested its targets, but apparently, the returns are so significantly above the hurdle rates that they dared to book them in advance. I assume this is a rather small portion of the performance fee potential due to the principle of conservatism. More of these should come as the fund is sold (25-27 is certainly a good guess).
Fintoil. Although the Fintoil fund’s size is quite small (EUR 50 million), its structure is such that the group’s performance fee potential, if successful, is quite significant. Fintoil’s ramp-up has progressed slower than expected, but by 2025, it has, to my understanding, gotten properly underway. Refinancing will be due in 2027, meaning a divestment would be realistic before then. Estimating the scale is very difficult, but we are talking about levels clearly below EUR 10 million. It’s good to remember with Fintoil that Taaleri also has a large investment from its own balance sheet in this (just under EUR 10 million), meaning a potential successful exit would come to the result through two channels.
Taaleri has recorded approximately EUR 8 million in income from the sale of the project development portfolio to the SW3 fund. This has not yet materialized into cash flow, but to my understanding, there is no essential risk associated with this; it is purely a matter of timing.
In the slightly longer term, performance fees should also be coming from the SolarWind2 fund. The Bioteollisuus1 fund has faced clear challenges (the largest holding just had to be written down), and performance fees from it will certainly be hard-earned.
In addition, Taaleri still has many investments on its own balance sheet, and these could also generate significant investment income in the coming years. Although these are not directly performance fees, I will also bring them up now. I already covered Fintoil above.
a) Texas wind farm. Taaleri has a just under 10% ownership (recorded at EUR 10 million on the balance sheet) in the Texas wind farm, which is a large target for the SW2 fund. The park is complete, and to my understanding, it would be ready for exit. There is significant appreciation potential here, although visibility is poor. We have an exit planned for this year, but of course, at this point in the year, it is starting to look unlikely. I believe the exit will happen during 2026.
b) Turku Market Parking. Taaleri is a major owner of Turku Market Parking (a very good question as to why). This project is also complete and ripe for exit. The problem has mainly been the situation in the Finnish real estate market. This could also generate some kind of performance fee, but its scale is also very difficult to estimate.
These were probably the most important ones; it’s hard for me to remember everything that’s there The point is that all these revenue streams should materialize within the next 2-3 years (excluding Aurinkotuuli2), meaning significant cash flow would be coming in.
Well, to be fair, the investment in Toriparkki was made, if I recall correctly, in 2018, when investment activities were truly opportunistic
To add to the previous message, returns may also come from the forest fund (metsä3) sold in 2023 if certain conditions are met. The development of forest funds has been quite impressive over the last couple of years, so a few million in returns might still drop in from here if things go well. No idea about the schedule or scale. Finsilva was sold in 2016, and an additional purchase price was recorded from it in 2022 (based on the operational development of 2020-2021, if I recall correctly). This, of course, does not mean that the timeframe would be the same here.
Thank you for a very comprehensive answer you are truly a professional!
Yes, a pretty good pot should come from that for next year if the guarantee chugs along as usual.
Hopefully, we won’t see a move where a new strategy is bought from abroad by acquiring a manager. Buying doesn’t work for such a small entity. If you get a good one, you’ll have to pay an exorbitant price, and the experts will eventually leave or put their feet up once they have millions in their pockets. A mediocre one, on the other hand, you can set up practically for free, but the product would have to be quite a joker for it to sell under a dollar.
The stock price will probably react quite sensitively from these levels when positive news comes out, but if they are expected individual returns, then a return to around seven is inevitable. A thorough overhaul is needed for this to recover; a takeover bid would do wonders.
Taaleri is indeed involved in RMC through two channels: 1) through the Telakka fund established in 2016 (https://www.taaleri.com/paaomarahastot/telakka) and 2) through its own balance sheet investment. The fund was small from the outset (EUR 20 million), meaning the fees received from it are small and are nearing their end as the fund approaches the end of its lifespan. To my understanding, RMC has not performed particularly well in the interim, so no performance fees should be expected. The balance sheet investment is very small, less than EUR 1 million (it could even be close to zero if RMC has had to be financed by external parties in the interim). So, in summary, this can only have a very marginal impact on Taaleri, even in the best-case scenario. It is, of course, a great thing for Finland that Taaleri participated in this opportunistic rescue operation in 2016; to my understanding, the shipyard’s continuation was not a given at that time!
Taaleri SolarWind III Fund Invests in 112-Megawatt Wind Power Project in Latvia
Taaleri Energia’s SolarWind III Fund is investing in the Smiltene wind power project located in Latvia. The wind farm is situated approximately 120 kilometers northeast of Riga. Taaleri SolarWind III Fund and the AEI fund managed by Lords LB Asset Management jointly own the project.
Construction began in the fourth quarter of 2024, and the wind farm is expected to be fully operational in the first quarter of 2027. The Smiltene wind farm consists of 16 Nordex 7.0-megawatt turbines. The wind farm is expected to produce approximately 330 gigawatt-hours of green electricity and reduce an estimated 64,000 tons of carbon dioxide emissions annually.
The project has been developed by a Latvian project developer in cooperation with Taaleri Energia’s team. Nordex is responsible for the wind farm’s maintenance under a 35-year agreement.
The project is financed by the European Bank for Reconstruction and Development (EBRD), Luminor, and the Nordic Investment Bank.
The project receives support from the European Union through the InvestEU Fund.
Nordea’s updated sum-of-the-parts analysis on Taaleri in its latest report:
Overall, quite similar thoughts on valuation as we have. As for other private equity funds, Nordea has taken a very bearish stance and assigned them a negative value. I myself considered our 12 MEUR value to be negative, but that -12 MEUR is quite a brutal estimate. It’s hard to see, however, that they couldn’t divest from that for some small price. At least I can volunteer if Taaleri ever wants to sell that and throw in 12-16 MEUR cash
I also cannot find the returns of old wind funds on Taaleri’s balance sheet from the calculation. It could be that Nordea assumes these will never be realized, but then there should be a corresponding write-down in the income statement, which I cannot find. Well, that doesn’t really affect the big picture; we agree that there is a lot of value in the parts, and if Group expenses could be eliminated, the value would be almost 2x the current share price.
Sauli has written the preliminary comments as Taaleri publishes its Q3 results on Tuesday.
The highlight of the quarter was the early September capital markets day, where the company discussed its updated strategy. Otherwise, the quarter has been quiet in terms of news flow, and there shouldn’t be any major surprises in the numbers. In the short term, investors’ focus is primarily on the company’s capital allocation, which is a key share price driver.
If Taaleri reports the result only on Tuesday, then why is there already a realized result in the preview which seems to significantly exceed Inderes’ estimates.
Yes, that’s such a huge discrepancy that it’s hard not to jump on that arbitrage. Evli’s result at Taaleri’s price is like a “crazy days” type of sale.
I don’t believe the market will price that in yet on Monday.
(Please, no one actually buy because of this message)
As you noticed, Taaler’s results will be published on Tuesday. There shouldn’t be any major surprises in the Q3 numbers, and the review period has been quiet in terms of news flow, with the exception of the CMD. Taaler’s updated strategy has four cornerstones, and I will briefly discuss their outlooks/drivers here.
Growth of capital funds . In the short term, new openings are expected from real estate, and next year, attention will turn especially to the launch of the SolarWind4 fund. For capital funds, the big picture is very clear, and the question is mainly about execution (there was room for improvement in this during the previous strategy period). It is unlikely that anything substantially new will be heard about this in connection with Q3.
Garantia’s growth. The focus here is on the recovery of the housing market; rapid movements do not occur in this business. Here, too, the basic trajectory is very clear, and the question is above all about the coefficient of market recovery. Garantia’s own performance has long been top-notch. It’s hard to see anything substantially new being heard in Q3.
Acquisitions. Of course, these are not whispered about in advance; they come like the proverbial bolt from the blue. The company has already said all it can by stating that they are actively exploring this option as well.
Direct investments from own balance sheet. This is an area where things can move quickly, and I would not be surprised if something happened relatively soon (either on the selling or buying side). The company has a lot of capital on its balance sheet to use, and the use of this capital (and success in it) is absolutely central to the share. I argue that own balance sheet investments are a key reason for the sharp discount of the share vs. sum of parts. This is an area where the company made surprisingly few moves in the previous strategy period, and the pace will certainly be faster in this strategy period. This is why I highlighted this angle in my preliminary comment. The Canadian biochar project is, in my papers, quite close to realization, and it is not impossible that some update on this will be heard in Q3 (hardly a final investment decision). Similarly, on the divestment side, there are many cases where something should happen relatively soon (old winds, Toriparkki, Fintoil, Texas..).
The point is that all these revenue streams should materialize within the next 2-3 years (excluding Aurinkotuuli2), meaning significant cash flow would be coming in. 
you are truly a professional!
. In the short term, new openings are expected from real estate, and next year, attention will turn especially to the launch of the SolarWind4 fund. For capital funds, the big picture is very clear, and the question is mainly about execution (there was room for improvement in this during the previous strategy period). It is unlikely that anything substantially new will be heard about this in connection with Q3.
The focus here is on the recovery of the housing market; rapid movements do not occur in this business. Here, too, the basic trajectory is very clear, and the question is above all about the coefficient of market recovery. Garantia’s own performance has long been top-notch. It’s hard to see anything substantially new being heard in Q3.
Of course, these are not whispered about in advance; they come like the proverbial bolt from the blue. The company has already said all it can by stating that they are actively exploring this option as well.
This is an area where things can move quickly, and I would not be surprised if something happened relatively soon (either on the selling or buying side). The company has a lot of capital on its balance sheet to use, and the use of this capital (and success in it) is absolutely central to the share. I argue that own balance sheet investments are a key reason for the sharp discount of the share vs. sum of parts. This is an area where the company made surprisingly few moves in the previous strategy period, and the pace will certainly be faster in this strategy period. This is why I highlighted this angle in my preliminary comment. The Canadian biochar project is, in my papers, quite close to realization, and it is not impossible that some update on this will be heard in Q3 (hardly a final investment decision). Similarly, on the divestment side, there are many cases where something should happen relatively soon (old winds, Toriparkki, Fintoil, Texas..).