How can Sitra’s capital accelerate growth? – An interview with Investment Director Sami Tuhkanen

What does the new investment strategy mean in practice? – Sami Tuhkanen, Investment Director at Sitra

Economic growth stems from companies, so Sitra wants to support the growth opportunities of Finnish companies and the creation of new success stories also through its investment activities.

In the coming years, we will direct more of the funds repatriated from current investments to the domestic venture capital and private equity market. We select funds that focus on Finland.

In which industries do you see the greatest growth potential?

We see growing demand especially in businesses related to artificial intelligence, digitalisation and the green transition.

Why are investments made through funds and not as direct investments in companies?

Since 2014, Sitra has not made any direct investments in companies, as fund investments enable us to better diversify our risks.

Another reason is that the role of a fund investor is natural for Sitra as a public actor. The selection of companies that end up as investment targets is then left to the well-functioning private capital markets. Venture capital and private equity funds are active investors who, in addition to financing, participate in the development of their portfolio companies in many different ways.

About 30 per cent of Sitra’s investments are already in Finland. Where is the capital allocated?

Through funds, Sitra has investments in both listed and unlisted Finnish companies, corporate loans, real estate, forests, and infrastructure projects. Corporate investments are widely targeted at different industries and companies of different sizes.  

Can you give examples of successful growth acceleration?  

The Finnish venture capital and private equity funds in Sitra’s portfolio now include, or have invested in, many strongly growing Finnish companies, such as Oura, Wolt, Iceye and Varjo.

Is Sitra taking more risk in its investments?

With the new investment programme, the risk level of the portfolio will increase somewhat. Sitra has had a fairly yield-oriented portfolio for a long time, and we are aiming for a real return of 3.5 per cent in the long term.

The Sitra Act requires that investments are carried out in a secure and profitable manner. Therefore, we invest extensively in different asset classes, such as equities, fixed income, real estate, infrastructure, and forests. In addition, investments are diversified geographically and over time. 

Sitra aims to grow within the limits of nature’s carrying capacity. How is this goal reflected in investment activities?

Responsible investment is an important goal for us. Among other things, we aim for a carbon-neutral investment portfolio by 2035, and this goal will guide fund selections. We have also taken the first steps in addressing biodiversity issues in our investment activities. 
 
Read more about Sitra’s investment activities:  
Sitra as an investor – Sitra