Solidium owns companies that yield attractive financial returns and are nationally important. According to the updated strategy, Solidium evaluates investment targets with an even stronger focus on their potential for national importance in the future. National importance can arise from economic perspectives, expertise, or the company’s position in a cluster that is important to Finland. Investment targets that do not meet the criteria for national importance at the time of investment should be able to grow and develop into companies that meet the criteria within ten years. We want to ensure that the anchor ownership or headquarters of such companies do not move out of Finland without good reason and a long-term justified valuation.
Solidium’s investments are made in shares, and money market investments are held only for liquidity purposes. We aim for a sufficient ownership stake in companies to have influence and pursue value creation plans. This usually means an ownership stake of over 10%, but a lower stake is also possible. Conversely, the ownership stake rarely exceeds 20%. We primarily invest in listed companies, but we can also invest in unlisted companies if they have a clear plan aimed at listing in the coming years. In our new investments, our investment is typically at least 50 million euros, and for the minimum investments, Solidium must have a view that the company is strongly growing and creating shareholder value.
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 nationally important 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 2023, this is the case in nine companies owned by Solidium. Solidium’s representatives in companies’ boards are individuals who are members of Solidium’s Board of Directors or executive management.