We invest in equities, maintaining money market investments only for liquidity purposes. We pursue a sufficient shareholding that enables us to promote the owner’s influence and value creation plans in each company. Usually this means a shareholding of over 10 per cent, although smaller holdings are also possible. The holdings rarely exceed 20 per cent.
In addition to yielding financial return, the investments are required to have a national interest. Due to these criteria, we focus on large companies, and our potential investments consist of companies listed in Finland as well as companies that have considerable operations in Finland. We want to do our part to ensure that the anchor ownership or headquarters of such companies stay in Finland, unless reasonable grounds and long-term valuation speak in favour of other types of arrangements.
Our operations as an active minority shareholder require considerable efforts to understand the portfolio companies and their industries. Our investment team assigned to the company in question
- carries out an analysis of the company
- frequently meets company management and other large shareholders
- visits production plants, attends capital market days and industry seminars
- studies the company’s competitors.
The in-depth information and views accumulated in this way will be the basis for the investment team’s value creation plan for the company and for the team’s efforts to help, through active dialogue, the company outperform its peers.
We want to do our part to ensure that the anchor ownership or headquarters of large companies stay in Finland, unless reasonable grounds.
Investment decisions rest with Solidium’s Board of Directors
Solidium has a Board of Directors appointed by the State owner. The Board has a fairly broad authority within the more general framework set by the State and defined in the detailed mandate issued by the Cabinet Committee on Economic Policy. Solidium’s investment decisions are made by the Board of Directors, and Solidium keeps the State owner informed of its central decisions. Investment decisions are only made when the financial interests are met, and the investment cannot be made if Solidium does not deem it financially justified.
Independent decision-making as well as a strong financial position establish conditions for Solidium to make investment decisions and participate in the portfolio companies’ financing rounds swiftly, if required. Solidium finances the share purchases from its own balance sheet, either by divesting some of its current holdings or using cash funds or borrowed money. We remit the profit distribution received from the portfolio companies to the State owner.
Aiming to have a seat in the board of each portfolio company
Board elections and preparing for them are central tasks of the large and long-term shareholders of companies. In most of Solidium’s portfolio companies, the shareholders’ nomination board prepares the proposal on board member election to the Annual General Meeting.
Influencing board elections and the work of boards of directors are among Solidium’s most important tasks.
Solidium’s long-term objective is to have a seat in the board of each portfolio company. Solidium wants to be involved in influencing matters which have a significant impact on the company’s performance and shareholder value. After the shareholders’ meetings of spring 2022, this is the case in seven companies owned by Solidium. Solidium’s representatives in companies’ boards are individuals who are members of Solidium’s Board of Directors or executive management.