Securities investment

The total investment assets of the University of Helsinki and the University of Helsinki Funds amount to a little over €500 million, while their real estate holdings are valued at approximately €1.5 billion.

The investment assets of the University of Helsinki consist of the capital accrued in conjunction with the 2010 reform of the Finnish university system and its returns. The investment assets of the University of Helsinki Funds have accumulated over a long period of time as a result of donations and investment activities.

The primary goal of investment activities is to increase the University’s financial stability and independence. The long-term expectation is an annual return of 4% + inflation. However, the target return on investment cannot be less than the allocation for core duties to avoid jeopardising intergenerational fairness. The University intends to establish a risk profile where the set target return on investment is achieved by taking as few risks as possible. The benchmark index is 70% shares and 30% interests.

The investment assets

Investment distribution 31 December 2022

At the end of 2022 the value of the University of Helsinki’s investments were 587 million euro.

Between 2019 and 2022, University of Helsinki investments generated an average annual return of 11.14%, an exceptionally high figure representative of a risk level where the weight of stocks in the investment portfolio is considerable. In practice, this also denotes a significant variance of return.

 

Investment distribution 31 December 2022: Listed stocks 69.9%, Listed bonds 23.8%, Other 5.5% and Cash 0.8%.

University of Helsinki and University of Helsinki Funds Time-Weighted Re­turn (TWR) as of be­gin­ning of 2019 and monthly re­turn

The graph describes the returns generated by the securities of the University of Helsinki and the University of Helsinki Funds from 2019 onwards. Because of the fluctuations of the securities market, the variance is high.

As a counterpart to the variance of return – also known as risk – the University can, in the long run, expect returns exceeding a risk-free rate of return. For the University to be able to cover negative returns and conduct its investment activities with a long-term approach, it is necessary to consolidate positive returns in funds.

Re­spons­ib­il­ity in in­vest­ment

Investment activities are guided by the Principles for responsible investment activities approved by the University Board on June 12, 2019. University of Helsinki has now published its first Annual Report on Responsible Investments.

The University’s investment activities must be in line with its values of social responsibility. As a responsible investor, we practise good governance.

We are a long-term investor and seek to ensure that our investments yield good returns and positive performance over a long period. We believe that a responsible company which considers environmental and social factors and complies with good corporate governance is a better investment in the long term.

In our investments, we primarily employ asset managers who take responsibility and sustainability into consideration. We will always consider the principles of responsible investment when making new investments and concluding asset management agreements.

News
The University of Helsinki fund list #hel­funds

The University of Helsinki seeks to enhance its investment activities by focusing its investments to effective and responsible investment funds. As a part of its responsibility efforts, the University will publish any new significant long-term investments as they are executed.

The fund list’s aim is to increase the transparency of the investment activities and promote equal access to investment product information. The fund list is not advice to subscribe to, redeem or exchange fund shares. Before making an investment, the investor should examine fund-specific material, which, among other things, describes the risks.

The University of Helsinki fund list #hel­funds

Spring 2019: Handelsbanken Global Index Criteria
Fall 2019: SEB Sustainability Global Index Fund
Spring 2020: SPP Aktiefond Global A EUR ACC
Fall 2020: Vanguard ESG Developed World All Cap Equity Ind EUR Acc

 

University of Helsinki’s investment assets: What, why and how?

The primary goal of the University’s investment activities is to increase the University’s financial stability and independence. Managing the accumulated assets professionally, with a long-term approach and in accordance with the University’s values as well as on the basis of research, is acting responsibly in terms of the University itself, its donors and society as a whole.

While the use of core funding provided by the government is strictly regulated, the return on investment increases the University’s autonomy and decision-making powers.

The assets invested in securities have accumulated over a long period of time through government capitalisation, endowments and the return on investment. Part of the assets consist of the capital accrued in conjunction with the 2010 reform of the Finnish university system and its returns.

Endowments allow various parties – individuals, businesses and foundations – to support the discipline of their choice by providing funds to a professorship in the field. In this way, the University gains more resources to carry out its core duties, teaching and research.

Donors can also leave it up to the University to allocate donated funds to things it considers important.

The University's investment activities are guided by the principles for investment activities drawn up in 2018, the principles for responsible investment activities drawn up in 2019 and the investment plan.

The University’s three-member investment team manages investments with the support of legal counsels and Financial Services. The team is headed by Chief Investment Officer Anders Ekholm. An external investment committee supports the team with advice and recommendations. Chief Financial Officer Marjo Berglund holds the ultimate responsibility for investment decisions.

At the end of 2021, the University’s investment assets in securities totalled €675,000,000. The investment assets are divided into securities owned by the University of Helsinki (approx. 56%) and the University of Helsinki Funds (approx. 44%).

The University’s investment principles have been established on the basis of financial theory and academic research. From the perspective of reporting, the investments are divided into listed and non-listed investments. Most of the investments are in globally distributed, cost-efficient and responsible ESG index funds (listed investments). A small share of the investment assets are in non-listed investments, all of which must, according to the investment principles, have a link to the University of Helsinki or alternatively a very clear perspective on responsibility. In addition to the investment plan, annual reports on investments, itemising each individual investment, are published on the University website.

In accordance with the University’s values, responsibility is a significant element of investment activities that manifests in several ways. Among other things, the principle of publicity is promoted in all investment activities, the goal is to make the University’s investment portfolio carbon neutral by 2030, and societal and environmental impact is sought through non-listed investments.

The University supports student entrepreneurship, for example, through the HELSEED programme, which is aimed at encouraging students to be entrepreneurs as well as providing information and support to startup teams at different stages of development. The University of Helsinki Funds can also make initial investments of €10,000–50,000 in startups established either before or after participation in the programme.

Helsinki Innovation Services Ltd, a company owned by the University of Helsinki, manages the commercialisation of research-based innovations in which the University has intellectual property rights. If such innovations lead to the establishment of spinouts, the University of Helsinki Funds will be one of the founding partners. The University of Helsinki Funds can also make additional investments in companies or sell its shares in them. Commercialisation is carried out in compliance with the University’s invention guidelines and commercialisation principles.

In accordance with a decision by the Board of the University, the endowments received by the University are invested, and an annual return of 4% is paid for them. The 4% return paid on endowments is paid regardless of the market performance of investment assets.

Often, donations are tied to promoting a specific field of science, for example, for covering the costs of an endowed professorship. The rector decides on the allocation of investment assets obtained through the governmental matched funding scheme. The use of donated funds is also regulated by section 2 of the Universities Act (558/2009).

The profits gained in good years are used to tide the University over less profitable years. This guarantees that there are no interruptions to, for example, endowed professorships even in the event of lean years.

Of the 4% return paid on endowments, three percentage points are allocated for spending every year. One percentage point of the return is added to the endowment capital and further invested, ensuring that the return to be paid increases in the long run and growing costs can be covered.

With a history of over 380 years, the University takes a very long-term approach to its finances. It is important to ensure that every student generation receives its share in both good times and bad. This is why only the return on investment is spent – and even that responsibly and systematically.