August 28, 2019 / 11:17 AM / 3 months ago

Finland's Solidium plans to cut number of holdings over time

HELSINKI (Reuters) - The head of the Finnish government’s investment firm Solidium said on Wednesday it made sense to concentrate its holdings and lower the number of companies in which it has stakes from 14.

“Over the long term we could maybe have a few companies less, rather than more, Chief Executive Antti Makinen told Reuters, adding he felt Solidium’s stock portfolio was “rather big” in comparison with its Nordic peers.

“With the organization and the capital we have, it makes more sense to concentrate than to diversify our holdings.”

“If we diversified, we would move toward a passive equity fund type of investing,” he said.

Solidium is a major shareholder in 13 listed Finnish companies, including Stora Enso (STERV.HE), Outokumpu (OUT1V.HE) and Metso (METSO.HE) and has a 0.1% stake in Nordea Bank (NDAFI.HE).

Makinen declined to comment on which holdings Solidium would consider selling off and said the changes could take time.

“We ... can wait for the right moment,” he said.

Solidium reported on Wednesday a return on its equity holdings of -3.0% in its financial year 2018-2019, which ended at the end of June, burdened in particular by steel maker Outokumpu and mining technology company Outotec (OTE1V.HE).

In recent years Outokumpu has struggled to make its Americas business unit profitable, while also being hit by stainless steel overcapacity in Europe, caused by the U.S-China trade row and tariffs.

But Makinen said Solidium, Outokumpu’s largest shareholder with a 21.69% stake, intended to remain a patient owner, saying once overcapacity is reduced, the company had good potential.

Reporting by Anne Kauranen; editing by David Evans

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