$1.3B Foundation Outsources Alts Portfolio

One of the largest foundations in Northern Europe has outsourced its alternative investment portfolio to local firm eQ Asset Management.

The Finnish Cultural Foundation, which had €1 billion (US$1.3 billion) in its coffers as of 2012, announced on September 2 that eQ would take over management of all current and future private equity investments, as well as any other alternatives.

eQ has roughly €7.1 billion ($9.3 billion) under management across all asset classes, making it Finland’s largest private management firm. Private equity investments account for more than 40% ($3.8 billion) of its total asset base.

The Finnish Cultural Foundation’s CIO Ralf Sunell noted that the organization had been pleased with their returns on private equity and has no plans to back away from the asset class.

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“However," Sunell continued, “the management of these investments requires a fair amount of administrative resources when compared with other asset classes, including monitoring and reporting systems. By outsourcing the management of new investments and portfolio administration to eQ Asset Management we achieve cost-effectiveness, excellent reporting, and investment service tailored to our needs.”

eQ has seen its asset management profits and revenue climb in recent years. Between the close of 2012 and 2013, its annual net revenue rose 4.6 percentage points and operating profit more than tripled, from 0.9% to 3.1%. During the same period, eQ closed its offices in Sweden and Denmark, suggesting the firm is focusing in its domestic market.

Both eQ and the Finnish Cultural Foundation described the outsourcing deal as a “long-term agreement.” The two parties signed the contract September 2.

Former House Majority Leader Eric Cantor was hired by boutique investment bank Moelis & Co. after losing his seat in the Republican primary in June.

According to the New York-based firm, Cantor will serve as vice chairman and managing director and also be elected to the board of directors beginning this week. In his new position, the ex-Virginia congressman will provide “strategic counsel” to both corporate and institutional clients, Moelis & Co. said.

“Eric’s judgment and tremendous experience will expand the capabilities our team brings to clients around the world as he has unique expertise in assessing complex situations and crafting innovative solutions,” Ken Moelis, chairman and CEO of the firm, said in a statement.

He added that Cantor would be a good fit with the firm due to his political and economic capabilities, including his work on lowering taxes, regulations, and supporting entrepreneurship.

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“Eric has proven himself to be a pro-business advocate and one who will enhance our boardroom discussions with CEOs and senior management as we help them navigate their most important strategic decisions,” he said.

The firm’s recent filing with the US Securities and Exchange Commission said Cantor would receive a base salary of $400,000, an “initial cash payment” of $400,000 and $1 million in shares. In 2015, Cantor would receive a minimum cash incentive of $1.2 million and $400,000 in restricted stocks.

Cantor also said Wall Street was a natural choice when it came to deciding the “next chapter of [his] career.”

“I knew I wanted to join a firm with a great entrepreneurial spirit that focused on its clients,” he said. “The new model of independent banks offering conflict free advice, in a smaller, more intimate environment, was a place where I knew my skills could help clients succeed.”

Moelis & Co. was founded in 2007 and focuses on mergers and acquisitions, recapitalizations, and restructuring. Headquartered in New York, the firm has 15 offices globally with 500 employees. The Wall Street Journal reported Cantor would open a Washington DC office for Moelis & Co.

Cantor stepped down from his post last month after losing the Republican primary in his congressional district to Tea Party-backed candidate David Brat. He had served a total of seven terms in Congress.

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