These properties were indeed sold just before interest rates really started to rise and OP’s festering wound burst, ruining the reputation of the entire sector for a while. Currently, the housing market isn’t moving in any direction, so it’s hard for Titanium to make any deals.
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Yes, they will sell “at market price,” but since that market price is so much lower than the price at which they are valued on the balance sheet, they won’t sell.
At some point, this bubble will also burst.
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May reports published.
Profit shares paid in May.
Hoiva paid out a reasonable 9.4 million, which is, however, over 50% more than a year earlier. Approximately half of the cash flow remained undistributed.
For some, the glass is half full, for others, half empty; it’s hard to say anything for certain, but in my opinion, the situation appears quite reasonable, considering the pending redemptions.
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Indeed, Sauli is absolutely right about this. Titanium’s sales machinery is ridiculously weak.
I myself was a long-time customer of Titanium. I owned Hoiva for years. Not once during that time was I contacted about whether I would be interested in investing more in Hoiva, for example, or in other funds. When Baltia became available, I researched the fund’s specs myself and invested in it in addition to Hoiva. The salesperson’s role was simply to “take the order.”
About 1-2 years ago, I redeemed both funds from Titanium. I would have thought that at this stage, at the very latest, a salesperson would have contacted me. But no.
Titanium’s sales are completely non-existent. In my opinion, salespeople should proactively contact customers more and offer different insights and options. Let’s just say that by all metrics, I am an ideal customer for them.
Now they just wait and take potential orders if customers are interested in buying. Not good.
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Hopefully this message reaches the company. Shareholders have been told repeatedly in various contexts about Titanium that they are investing in sales, etc., but this is quite a grim account in comparison.
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By the end of 2017, during the IPO, the AUM of funds managed by Titanium was approximately EUR 112 million.
According to the latest reports, the AUM of the funds is now EUR 731 million.
This means at least EUR 619 million worth of funds have been sold.
Plus what has been distributed to unitholders as returns, interest paid, management fees paid. Minus value increases. Perhaps this way, with such a formula. The return of Hoiva has been 139% since its establishment, i.e., since 2013. Of which perhaps half has been distributed to unitholders. On the downside, calculated by square meter prices, values have been increased by perhaps about 1.5% per year.
I would estimate that, considering the aforementioned specifications, funds worth something like EUR 650 - 750 million have been sold since the listing. That is, in 7.5 years. Of which for three years the real estate market has been in total shock due to interest rates rising hundreds of percent in a short period. From almost zero to almost 5 percent.
So someone has ultimately sold those funds, and who else but Titanium’s sales organization. I wouldn’t consider the performance or the sales engine as entirely worthless assets. Do better if you can. Even though a few dry years are now undeniably behind us.
Disclaimer: For your information, the stock price is now roughly the same as in the IPO (vs. the change in AUM). And the return of real estate funds, taking into account debt leverage, is still among the best in the market. And it has rather improved than deteriorated.
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Well. If receiving orders can be considered sales, then certainly yes. Hoiva has been the most talked about/best known fund in the market for a long time, and in my opinion, the current growth doesn’t say anything about the quality of the sales itself. Heaven forbid what would happen if the sales organization actually started selling.
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Well, my message was just facts. It should always and immediately be questioned 
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Everyone here would be top salespeople if they could sell Juhla Mokka for 2€ a package for several years. During the zero-interest rate era, Hoiva was really easy to sell, as the return was strong and steady and the product was easy for customers to understand.
The quality of sales is being tested now that the market is difficult and perhaps rising from the bottom. Now all potential customers should be contacted and confidence in the real estate market should be built. Titanium’s stock will indeed double from its current level, but the timing is very difficult to say.
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Yeah, if you don’t have to sell and the products are selling, then you just raise the price. However, there isn’t enough for everyone to buy.
These don’t work like retail stores. If there’s a good product that sells itself, then you can choose the customers.
And then the best people are chosen. Seller’s choice.
Hoiva’s problem for a long time was also that suitable investment targets were hard to find to funnel money into, if new subscriptions came in. This dynamic has probably also caused various problems within the company regarding Hoiva, but the essential question is, why don’t sellers push other products to the same customers?
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A couple of quotes from an article in Helsingin Sanomat dated 16.6. at 22:24.
“The wellbeing services counties of East Uusimaa, Central Finland, and Lapland will practically lose their autonomy in organizing services.”
"The Central Finland wellbeing services county claims to have been deprived of almost 100 million euros in funding due to incorrect data.
The Ministry of Finance has not deemed it necessary to rectify the funding of the Central Finland wellbeing services county, even though the incompleteness of the initial data is known."
To my eye, it would seem that the political climate is likely to remain unfavorable for care properties until the end of this government term. Occupancy rates are still high, of course, but the growth of care services doesn’t seem to succeed when wellbeing services counties are saving. Helsinki was punished for saving too much, and those wellbeing services counties are being punished for not saving enough, even though it’s at least partly due to incorrect diagnostic data. Lower corporate taxes bring relief, but hardly enough in Titanium’s case to compensate for the cuts made by wellbeing services counties. Or what do the experts in this thread think about this?
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Titanium launches PE fund:
The fund invests globally through open Private Equity target funds in various sectors, companies, geographical areas, and funds established in different investment years, resulting in broad diversification that also extends to different market situations and segments. Private Equity investing offers a way to participate in the development of companies that are not publicly listed.
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The Magic Man has given his comments on the new PE fund. 
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Surprisingly quiet here in the thread regarding the new fund, even though this launch has been eagerly awaited 
So I’d like to ask now, what’s the feeling about the new product? Is this the product that will “break the bank” and can grow to hundreds of millions in size? Is a “new Hoiva” being born here? The fact is that no other new product launch from Titanium is coming this year; this is the product on which high expectations have been placed. Next year we will probably get something new again, but fundamentally, it cannot be assumed to be more interesting in profile than this (it could well be, for example, a traditional product). Since a PE fund is a fund of funds, Titanium’s fee in the retail series is probably at the 1.5% level (about half of Hoiva’s). Therefore, the fund needs to grow to hundreds of millions for it to have a groundbreaking significance for the company.
What do you think @gearloose1 @jasso @Tunturisusi and others?
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I don’t believe that the fund of PE funds will break the bank or be a new Hoiva.
I think this will be a smaller addition to Titanium’s fund portfolio, which is also good. A fund of funds like this probably doesn’t require the same amount of work or expertise as Hoiva or Baltia, so even if it remains smaller in size, the fund can still be good business.
Such a PE structure will hopefully appeal to institutions. It’s hard to see private investors being interested in this. For example, Hoiva and Baltia (and in recent years, bond funds too) have a clear story to sell with strong arguments. What is the story in this PE fund? At most, generic data on industry returns and the benefits of diversifying into different asset classes.
So, a decent opening and hopefully it will take loose money from institutions, but this won’t break the bank.
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It’s hard to see that Titanium’s PE FoF specifically would be particularly interesting for institutions. What makes Titanium’s portfolio managers so much better than larger domestic or foreign management teams? Can a small fund get to invest in those historically best black boxes when everyone wants in on them? If one wants to make a business out of this, then the runway is, in my opinion, the length of this first Fund. We’ll see in 2033.
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This relatively generic fund of funds is no new Hoivakiinteistö. Differentiation with such a product is difficult, so it’s unlikely to be a groundbreaking sales success. In itself, it can be a good addition to Titanium’s overall offering, as PE funds interest many investors, and it’s beneficial for both customer acquisition and retention to be able to offer a broader palette under one roof.
@Sauli_Vilen do you think so-called “anchor investors” have already been agreed upon in advance to help raise a certain fund capital right at the start? And as a follow-up question, if this is the case, do such anchor investors usually have better terms than the so-called official price list, e.g., regarding management fees?
This latter question is purely out of interest in how fund launches generally work. I don’t believe it has much significance for Titanium’s business whether this fund generates a few tens of thousands more or less in management fees.
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