Keva, Finland’s largest pension fund, is linking up with Ilmarinen, Elo and other pension providers to invest €150m jointly in Finnish growth companies via a newly created fund.
The three pension funds along with Finnish financial services groups LokalTapiola and Fennia have formed the investment fund Kasvurahastojen Rahasto III Ky (KRR III). State-owned investment company Tesi (Finnish Industry Investment) has also joined the new fund.
Markus Pauli, Keva’s CIO for alternative investments, said: “The fund combines two things that are important to us: firstly, it has a positive effect on the whole of Finnish society as it finances and helps growth companies, and secondly, the fund gives the investors sufficient return potential, which is obviously a prerequisite for employers to invest in it.”
KRR III is the third in a series of funds, with the previous vehicles having included “famous success stories”, Keva said.
Examples of these companies include Nordic pizza restaurant chain Kotipizza, department store chain Puuilo and Nordic restaurant food delivery app Wolt.
The KRR investment fund model involves capital investors offering growing businesses not just financing but also practical support, Keva said.
Capital investors usually sit on the boards of the companies the funds invest in, meaning they are also available to give those businesses advice and guidance.
Keva’s investment portfolio was worth €48.5bn at the end of 2016, according to IPE’s Top 1000 Pension Funds survey.
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