Mikko Mursula: Forging ahead with new Ilmarinen investment team line-up
Finland’s Ilmarinen continues the hunt for real assets with a new portfolio structure and investment team line-up.
Mikko Mursula, CIO at Ilmarinen, is heading up a newly formed investment team after the merger with the EUR 6.3 billion Etera at the beginning of this year. He told FBNW that although the two investment portfolios have been managed as one from the beginning of January, the investment team has been revamped over the first couple of months and the new line-up is now in place.
“We had to make some decisions due to the overlapping of some roles at the investment side, but overall the process has been pretty smooth,” he says. Although the merged company has seen the departure of some of the key members such as Etera’s chief investment officer Jari Puhakka and Ilmarinen’s head of listed investments Staffan Sevón, new people have emerged as key players in the new organisation.
“Juha Niemelä is one of the people that is now reporting directly to me along with our other department heads: Annika Ekman from equities and Esko Torsti from unlisted investments,” Mikko Mursula explains. He says that the pension company is currently searching for a head for fixed income, which, in the meanwhile, will fall under Juha Niemelä’s domain. “Juha is now leading that department but it won’t be a permanent solution,” he says.
Mikko Mursula says that he is unable to comment any further at this stage on whether someone from outside or in-house will be appointed to run the fixed income side.
The merger has also led to some reorganisation of the investment department. The private debt and private equity portfolios have been merged into one, headed by Jukka Reijonen, Etera’s former head of real investments. “We decided to combine these two portfolios for the sake of clarity and put them under one team,” Mikko Mursula says. Similarly, the real estate portfolio has been divided into domestic and foreign investments, headed by Tomi Aimonen and Mikko Antila, respectively. After the merger of the two portfolios, Ilmarinen is a significant player on the domestic real estate market. However, Mikko Mursula says the real estate teams will continue to review the investments within the two portfolios over the coming months. Just recently Ilmarinen announced it had sold an office property in Töölönlahti 3, Helsinki, as a part of an effort to streamline the investments within the domestic real estate portfolio. The EUR 190 million deal the largest single-asset office transaction ever in the Finnish market.
The reorganisation process itself started with an initial analysis on what sort of organisational line-up would be ideal for managing the EUR 45.8 billion investment portfolio. After the decisions were made concerning the asset classes and how they should be allocated under the new structure, the company started by appointing the upper management and continued from there with the mid-level appointments. “We didn’t have to do a complete revamp or anything like that because Ilmarinen and Etera had the same asset classes in their portfolios, so the merging of the two was pretty straight forward, although it was a major process,” Mikko Mursula says.
He adds that the merger has not changed Ilmarinen’s long term investment plan. “We’re still looking to add alternatives although the current risk-return profile of some alternative assets looks a bit gloomy,” he says. “I think we could see some overheating in some alternative asset classes due to the low interest rates that have pushed large numbers of investors into real assets.” He says the increase on the real asset side will be made at the expense of fixed income.
Last year Ilmarinen’s investments returned 7.2 per cent.