Taaleri updated its strategy, group structure remains unchanged

Translation: Original published in Finnish on 9/1/2025 at 9:33 am EEST.

Taaleri announced its updated strategy for 2026-2028 this morning. The strategy is largely a refinement of the previous one, with no major structural reforms announced. The most significant change is in the area of the company's own balance sheet investments, where the focus on the bioindustry has been dropped, and investment activity will be more opportunistic going forward. Preliminarily, we consider the refinements to the strategy to be reasonable. However, they do not solve the key challenge posed by the conglomerate structure and its associated low valuation level. In its press release, however, the company hinted at the potential for larger arrangements in the future. Taaleri is hosting a Capital Markets Day tomorrow starting at 1:00 pm EEST, which will be broadcast on InderesTV. We will update our view on Taaleri on Wednesday, after the CMD tomorrow.

Strategy refines previous policies

The focus areas of Taaleri's updated strategy are:

• Capturing Garantia’s full growth potential.
• Expansion of the private asset management business by scaling products within its current strategies and launching new products.
• Attractive return on direct investments through development capital.
• Implementing the growth strategy also through selective M&A.  

While there were no surprises in the strategy for Garantia, the company clarified its role within the group from a communication perspective. Garantia aims to generate a stable cash flow to enable investments in other business operations.

In private asset management, the key change is opening the door to new products and strategies. We understand that the company is also exploring options for expanding into new product areas, in addition to its current three (renewable energy, bioindustry and real estate). In practice, this would mean acquisitions because building up private equity funds from scratch is a long and rather rocky road. The main challenge is the very limited number of potential targets in Finland.

Significant change in investment activities on own balance sheet

The most significant changes in strategy were seen in the company's investment activities on its own balance sheet. The portfolio's focus on the bioindustry was completely eliminated, and the previous minimum target size of 100 MEUR for the investment portfolio was also removed. Instead, Taaleri's investments on its own balance sheet will revert to its previous highly opportunistic approach and, as we see it, the guiding principle behind its investment activities will be purely portfolio returns. The company also seems to have more flexibility in terms of size than before. In general, we view the removal of the bioindustry focus positively, given the significant changes in the underlying market over the past couple of years. Taaleri's own balance sheet investments have been very successful in the past, so in this sense, these investments can be viewed positively. At the same time, however, we find it difficult to imagine the market being willing to assign full value to them before the arrangements become concrete.

M&A a key part of strategy

As the final cornerstone of its strategy, Taaleri emphasizes the role of M&A as part of its growth strategy. This naturally refers to private equity fund growth in particular.

Statement from the CEO: “Taaleri also has a strong track record of successful acquisitions and divestments, and we remain open to M&A opportunities going forward.” In our opinion, this is also a clear indication that, if necessary, Taaleri's parts are available for sale, provided the price is right. This is obviously a good thing, as we don't believe Taaleri's current structure fully reflects the value of its parts.

Minor adjustments to financial targets

Taaleri also updated its financial targets for 2026-2028.

• Profitability growth: Growth in operating profit from continuing earnings 12% p.a. on average (new target) 
• Return on equity (ROE) at fair value: Above 15% p.a. on average over the strategy period (updated)
• Dividend policy: At least 50% of the financial year’s profit to be paid as dividends (unchanged)

We believe that growth in operating profit from continuing earnings is a good target. Regarding the dividend policy, we would have preferred more visibility on the use of excess capital. Our preliminary interpretation is that the excess capital will be invested in the business, so no significant value will be released through an additional distribution of profits. We will receive confirmation of this tomorrow at the CMD.