Home ListingSeptember 2, 2014

$1.3B Foundation Outsources Alts Portfolio

eQ Asset Management, based in Helsinki, has won the mandate.

Reported by Featured Author

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.

“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.