Customer assets under management at Finland’s Evli reached EUR 18.5bn during the first quarter of this year, up from 18.0bn at the end of 2023.

The development is equivalent to growth of 2.8%, according to AMWatch’s calculations. 

This places Evli Group behind Norway’s DNB as well as Nordea in AMWatch’s comparison of large Nordic asset managers that have already published their quarterly results.

“Evli continued to be the third biggest fund management company in Finland with a market share of 6.9%. Our client assets under management rose to an all-time high EUR 18.5bn, driven by positive market developments and net subscriptions,” CEO Maunu Lehtimäki tells AMWatch in written comments to the Q1 results.

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During the quarter, net flows into Evli’s investment funds totaled approximately EUR 250m and mainly went to short-term fixed income funds and global equity funds. In two crucial areas, however, flows were disappointing.

”The key aspects of Evli’s strategy, international sales, and alternative investment products, developed below expectations during the quarter,” Lehtimäki notes in the Q1 report.

Outside Finland, Evli’s investment products are sold in 14 countries in Europe. In the Nordics, the sales are direct and in Europe, they take place through co-operation partners.

“Net redemptions by international clients totaled EUR 35m, and international clients accounted for 18% of Evli’s total fund capital, including alternative investment products,” the CEO adds. 

In Q4 last year, international clients accounted for 19% of Evli’s total fund capital, a drop from Q1 last year, when this figure stood at 21%. The highest level of fund capital provided by international clients was recorded in 2021, when it accounted for 27% of Evli’s total fund capital, but in 2022, this figure dropped to 20%. 

The decline in flows from international clients echoes the development seen at Nordea, which has seen outflows from its international wholesale channels in several consecutive quarters. 

Evli reports that in Q1, sales of its alternative investment products totaled EUR 45m, down from EUR 83m in Q1 last year. 

“Increased interest rates, lower valuations, slowdown in M&A activity and hence a decrease in returns have reduced investor interest in committing to new private equity fund investments. In the longer term, however, we expect that interest in private equities will once again recover,” Lehtimäki adds. 

European growth and precious metals

Today, Evli manages 72 funds, 54% of which are UCITS funds. 

During the first quarter, the company’s fund range was expanded with the addition of four new funds. One of these is Evli Europe Growth, which invests in European quality growth companies. The fund is a so-called sister fund to Evli’s USA Growth Fund. 

“We invest in high-quality growth companies, so quality is an important factor in equity selection. In growth, we focus on expected growth and growth momentum. For example, one measure of our ability to anticipate future growth is the company’s investments in research and development,” said Evli’s Head of Systematic Funds Peter Lindahl when the fund was launched earlier in April.

Three of the new funds were transferred to Evli after it acquired 67% of the shares in Finnish investment service company Zenito in the end of January. The remaining 33% of the shares were retained by Zenito’s founders. At the time, Lehtimäki called the acquisition as a “logical next step in Evli’s strategic goal to become a leading Nordic wealth manager.”

The funds transferred from Zenito include Evli Hannibal, Zenito UK Value Fund, and the only precious metal mining fund in the Finnish investment market, Zenito Silver and Gold.

Lehtimäki explains that in Q1, all of Evli’s fixed income funds developed positively except for one. 

“On the fixed income side, the best returns relative to the benchmark index were generated by Evli Nordic Corporate Bond and Evli European Investment Grade funds. The return development of almost all equity funds was also positive during the review period, driven by the general market situation. Relative to the benchmark index, the best returns were generated by Evli GEM and Evli USA Growth funds,” he notes.

On uncertainty

Going ahead, Lehtimäki expects strong returns, especially from corporate bonds. New fund products are also on the cards.

“Depending on the market situation and investor demand we might come out with some new UCITs and/or alternative investment funds but we cannot say more on this at this point in time,” Lehtimäki hints and adds: 

“Global equity markets have so far performed well, but valuations are elevated, and global growth outlook is uncertain. The expansion of geopolitical risks, fears of inflation and interest rates, and concerns about the sustainability of economic growth increase uncertainty.”