Market environment

Evli’s business environment is challenging. The equity market that has rose for a record period and political uncertainty have made investors cautious and to favor lower risk and thus lower margin products.

This has been evident as redemptions in Evli’s equity funds and correspondingly in the growth of fixed income funds. Demand for passive products has continued to grow and consequently the prices of active investment products have been pushed down. Demand for alternative investment products has also grown. Evli has responded to this demand by making a host of new funds that invest in real estate and private equity funds available for its clients. Despite the uncertainty, the situation in the company’s domestic market in Finland is quite stable and the conditions for growth of the company’s traditional operations are good, particularly due to the expanded product selection.

In line with its strategy, Evli has focused increasingly on international sales and developing of alternative investment products. These are considered important sources of growth for the company and a way to further diversify the company's revenue base. Work has also been done to further improve scalability.

In terms of international growth, the company's focus is on the Nordic and European markets. Moreover, Evli has entered into fund distribution agreements with Latin America for example. In addition to product availability, the streamlining and adaptation of administrative processes to correspond to the standards that investors are accustomed to on other markets are critical for the success of international growth. Evli is excellently placed where international sales are concerned, and the image of a high-quality Nordic fund management boutique is of interest to foreign investors.

Alternative investment products are another important strategic focus area for Evli. Strong demand for these products has continued and the market has been favorable for the growth of the asset class. This is a challenging asset class when it comes to seeking attractive return for investors, which also covers the risks contained in the investment which is always long term. The asset class is also very competitive. Evli launched three new alternative investment products during 2018 and one fund investing in private equity funds during the first quarter of 2019. The company’s goal is to turn alternative investment products into a major source of revenue.

Updated: April 26, 2019