Taaleri Oyj (TAALA) Earnings Call Transcript & Summary

Good morning, and welcome to the presentation of Taaleri's results for the fourth quarter and financial year 2025. My name is Linda Tierala, and I'm heading Investor Relations at Taaleri. Presenting today, we have our CEO, Ilkka Laurila; and our CFO, Lauri Lipsanen. In addition, we have a special treat for you today, since we have Antti Salmela, who is Investment Director at Taaleri; and Saara Kujala, who is CEO of Ren-Gas, and they will present Taaleri's latest investment in Ren-Gas. We also have a Q&A session at the end of this webcast. And if you would like to ask a question, you may do so at any time through the chatbox in the webcast platform. With that, it's my pleasure to hand over to Ilkka. Please go ahead.

Thank you, Linda. Good morning on my behalf as well. It's like usually at this time of the year, it's time to go through some of the highlights and the recent development in '25, as well as go through our financial development during the last quarter. But starting with the highlights. First of all, continuing earnings grew at 17%. That was obviously, mainly driven by Renewable Energy and the final close of the SolarWind III Fund. And in Taaleri Energia, the earnings grew at 28%. Following that, like we have already earlier communicated, the SolarWind III Fund achieved its final close, with a great achievement of EUR 630 million in investment capacity, out of which that EUR 557 billion is fee-generating AUM. And that is still, like I said earlier, that is the biggest private equity fund investing in infrastructure here in Finland. Followed by that, Garantia strengthened its market position, already 1 in 8 housing transactions completed in Finland utilize Garantia's residential mortgage guarantee and Garantia services. So that has increased quite significantly during the last year, even though that we haven't actually published the actual number, but that's where we can see the kind of the uptake of Garantia's development. So even though that the housing market has been in a turmoil, the Garantia has been able to increase its relative position in housing transactions. Then that has led to a situation that Garantia's income has also developed positively. So the insurance service result grew at 8%, and followed that by the nice investment income in P&L recognized level, the EUR 3 million during the last quarter. Then like we also have already communicated, the first investment, which is aligned with our updated development capital strategy was executed during the last quarter. So we invested in Ren-Gas, which is power to gas solution provider in renewable e-methane, and you will hear more on that investment later during today's presentation. And we were able to increase activity in real estate, as the market is slightly recovering that Eden Living, which is the JV with the Finnish pension institution, Keva, we have been able to execute more transactions in that, and that is progressing quite significantly during the fourth quarter as well. If we kind of compare our achievement during the last year versus the strategic priorities, you should maybe note that in our Capital Markets, we published the strategic priorities from '26 to '28. But already during '25, we have been able to gain great progress, when it comes to strategic priorities. Like I said, in Garantia, market share in residential mortgage guarantees increased significantly, 1 in 8 transactions utilizing services, and in addition to that, Garantia completed its first nonpayment insurance transaction outside Finland. So we have been able to take first steps to internationalize the business, which is one of the strategic goals and priorities for Garantia's strategy period '26 to '28. In Private Asset Management, like I said, the SolarWind III Fund reached its final close. And notable is that 64% of the commitments actually came from international investors. So it is highly international and good kind of statement from the international investors that they trust in our product and services and investment capabilities in there. In addition to that, the joint venture with Keva, EUR 300 million established at the beginning of '25 -- by the year-end, 3 investments have been made and there are several more under negotiations. So it is progressing quite nicely, especially considering the market environment that we are facing and working towards in real estate business. Finally, our development capital segment kind of -- we have been -- first of all, we have kind of restructured and reorganized the whole development capital function during the year. We have kind of renewed the organization, as well in that part of our business. And with that, we were able to finalize and complete first development in that category, so that is also progressing already quite nicely, even though that the strategy was only published at the beginning of September. Then if you take a look at the -- then the key figures and the highlights from the numbers perspective, and if you would concentrate on the lower side of the slide for the full year numbers. Continuing earnings, EUR 42.4 million, growth 4.4%; revenues, EUR 61.2 million, negative development, 13.2%, and that is mainly driven by the investment income decline, which we have said that and which is obviously fluctuating quite significantly between different financial years. And in '24, we had a quite exceptional year for investment income and investment result. Operating profit, reflecting that change in our investment revenue ended up having EUR 25.9 million, and the earnings per share for the financial year is at EUR 0.59. Then if you take a closer look of the different business areas and segments, starting with Garantia. Like I said, the insurance service result during the last quarter was that EUR 3.6 million. The investment income combined, so meaning that it includes the P&L recognized investment income as well as the investment income, which is recognized in the comprehensive income part of the financial statement. That totaled at EUR 3.9 million compared to EUR 1.8 million last year. But then I would like to highlight the graph on the columns on the right-hand side of the slide, which is presenting the premiums we have received, compared to last year, compared to insurance revenue and how that has been developing. So the kind of the premiums received is a good proxy for the cash flow. So how much kind of customers are paying the fees when they are kind of having a contract with Garantia. And that is then in a P&L perspective, that is then recognized under the IFRS in a more stable revenue development. But as you can see, actually, the incoming cash flow as a proxy has developed by that 27.3%. So quite significant increase in cash flow, considering, again, what kind of market environment we are operating. So to kind of summarize in 1 in 8, and actually more than 1 in 8 in mortgage transaction or the housing transaction are actually utilizing Garantia's services at the moment. And in addition to that strategic progress in internationalization, been able to complete the first insurance transaction outside Finland, in the Nordics, with one of the most significant Nordic financial institutions. Then if you take a look at the balance sheet side of the current business, the insurance portfolio increased from EUR 1.7 billion to EUR 1.8 billion. 84% now is consumer exposure related to mortgage loans, and 17% related to corporate exposure and corporate loans as well as the nonpayment insurance type of services. Investment portfolio increased from EUR 158 million to EUR 166 million. And that increase is also partly driven by increased equity exposure. So if you take a look at -- so the share and funds proportion is now 25%. And if you add that the real estate and private equity funds, the total equity exposure is close to 30%, and that has been one of the kind of drivers, obviously, as the stock market has developed quite nicely, especially during the fourth quarter of the last year. Then moving on to Private Asset Management. Starting with the Renewable Energy segment or the business. Revenue increased from EUR 7.6 million to EUR 8.1 million, but operating profit declined from EUR 3.4 million to EUR 2.4 million. Key levers on that during the last quarter was that there was actually more pass-through invoicing, so which is recognized both in a revenue line item as well in costs. But in addition to that, the cost structure -- that there is more cost accruals related to variable personnel expenses. AUM increased now from that EUR 1.7 million to EUR 1.8 billion. And if you take a look at the last vintage of the SolarWind III Fund, here is a couple of pie charts that describes the kind of the split between different categories, how you want to look at it. First of all, like I said, 64% of the commitments came from international investors. 75% came from existing investors, meaning that they still trust on our business and have an -- increased their commitments. But then on the other hand, 25% came from the new investors. So we've been able to increase the share of wallet of our existing LPs. And in addition to that, attract new investors to our funds. 84% of the AUM and the commitments came from the institutional investors and 16% of the high net worth individuals. Then moving on to other private asset management business. Quite stable number, you could say, revenue, continuing earnings as well as operating profit, very stable numbers compared to last year numbers. Obviously, much more happening under the hood. And hopefully, we are able to kind of proceed with our -- and have a clear progress with our strategy during the financial year and therefore, able to kind of have a more significant movement in these numbers during '26 as well. Then again, moving on to Investment segment. Revenue is now at EUR 0.3 million, which is quite significantly different compared to last year. And that is obviously, driven by the development portfolio sales in the last quarter last year, and that also is clearly reflected in the operating profit numbers of that segment. Moving on, if you take a look at the investment portfolio's fair value, quite significant actually 25% increase in the fair value. So -- at the end of last year, the fair value was EUR 55 million, now it's EUR 69 million. So a 25% increase in fair value in our direct investment portfolio. And obviously, now a new addition to our development portfolio, that 2% of the total portfolio and the rest of the development, you can -- and the investments you can see there in the pie chart. Then if you take a look at the -- especially the development capital investment highlights and maybe highlighting some of the development, not going through all of these. If we would concentrate on Fintoil, first of all, the biofuel market is developing quite positively, and there has been increased demand, and we believe that it will continue in '26 as well. Then on the other hand, the less significant segment, the biochemicals, there the demand has been quite more weaker and the price development has been also quite weak in there. But all in all, year-to-date numbers at the end of September increased that 46% versus a year ago. So quite significant volume increase in Fintoil's operations. Unfortunately, we are not able to publish the full year numbers in Fintoil. But as you can see that already the first 9 months of last year developed quite significantly on a positive territory when it comes to the -- especially the volume, which is obviously critical in that kind of refinery business. Then maybe a couple of highlights from Toriparkki, which is another big investment in our balance sheet. That is the kind of the parking facility located under Turkus Market Square. Volume increased by 7%, very stable business, but continuously growing an EBITDA by 15% during 2025. And most likely, we are able to return cash flow also in the future from that investment. Then obviously, you will hear more on the recent highlights and development in Ren-Gas and Ren-Gas operations shortly. It's time to hand over to Lauri, who will walk you through the recent financial development of Taaleri.

Thanks, Ilkka. Hello. My name is Lauri Lipsanen, Taaleri's Group CFO. And today, I present Q4 financials to you. In the Capital Markets held in September, we published our financial targets for the strategy period 2026-2028. As a recap, we aim for 12% average annual growth in operating profit from continuous earnings, at least 15% return on equity target a fair value on average, as well as a dividend payout ratio of 50% minimum, however, taking possible capital requirements into account. As visible, growth in operating profit from continuing earnings was modest in 2025. Return on equity was 11% and the proposed dividend payout ratio is in line with the target. Taaleri has 4 sources of revenue. Continuing earnings create a strong foundation for profitability, while other revenue sources are more fluctuating. And for instance, no positive performance fees were recognized in 2025. Full year revenue in 2025 was EUR 61.2 million and operating profit amounted to EUR 25.9 million. During the last quarter of the year, operating profit was EUR 5.7 million. This level was lower compared to the strong comparison period year when operating profit was EUR 9.4 million. Continuing earnings grew by 17%, driven by mainly -- following SolarWind III fund final closing, further impacted by current year's strong operative performance. However, as stated, only a minor negative performance fee adjustment was recorded in Q4 '25, whereas a year ago, the performance fee of EUR 1.8 million was recognized. In addition, investment income was lower than in the comparison period as the comparison period was positively impacted by the development fee of EUR 5.8 million. When comparing full year operating profits, the big picture is that continued earnings from Private Asset Management grew by 17%, mainly because of the successful fundraising for Taaleri SolarWind III Fund. However, net income from investment operations declined from the previous year, almost by EUR 12 million. The net investment result in 2024 contained Renewable Energy-related development gains of roughly EUR 40 million, and also current year's investment result was positively impacted by the declined interest rates in 2024. As a result, operating profit declined to EUR 26 million for 2025. As visible on the left-hand chart, quarterly continuing earnings clearly increased in Q4 '25, however, the total revenue continued to fluctuate. This fluctuation has been largely driven by changes in net investment income, which have further impacted in quarterly operating profit. On the last 12-month basis, the composition of revenue is more balanced. Continuing earnings have been growing by 4.4% on average, while other than continuing earnings have declined on an LTM basis. The decline in net investment income has been, for instance, due to 2024 operating profit was positively impacted by aforementioned Renewable Energy development portfolio gains. Also, 2024 was impacted by performance fee of EUR 1.8 million. Then we will have a look on Garantia. The extended weak development of the Finnish housing market in recent years has reflected in Garantia's result. However, as visible from the left hand chart, insurance revenue has remained quite stable for a longer period, while insurance services expenses have increased slightly. The total operation profit of Garantia has declined on a LTL basis mainly because of a strong investment result in 2024, and increased insurance service expenses. This is how the profit and loss result looks like, however, the underlying performance has been stronger. Growth in premiums received was 27% in 2025. However, as visible, insurance revenue increased only slightly, as changes in premiums received in Garantia's insurance revenue comes with a delay because of IFRS accounting principles. Also there has been contractual changes, creating delays in revenue recognition in terms of IFRS. Compound annual ratio has remained strong despite the increase-- it increased last year, driven by increased claims ratio. Roughly half of the claims ratio increase was related to the impact of new claims, as in contrast to 2024 -- claims ratio was positively impacted by changes in estimates of claims that have incurred through previous financial years. Garantia's return on equity at fair value is at an excellent level and insolvency ration remains strong. Garantia Board of Directors proposes a dividend of EUR 18 billion will be paid for the financial year 2025 to parent company Taaleri plc. What comes to Private Asset Management, continued enhanced growth from 13% to 17% on an LTM basis, mostly due to SolarWind III final closing. LTM operating profit however declined for Q4 mostly due to lack of performance fees, recognised in 2025. Whereas, for instance, Q3 '25 LTM operating profit margin was still positively impacted by the performance fee of EUR 1.8 million booked for Q4 '24. Investment segment's investment portfolio grew by EUR 2.2 million to the last quarter of 2025. There were 4 main levers impacting this change. First of all, the fair value of Trustco Chilean Eastwind increased by EUR 2 million, driven by positive fund NAV change. Secondly, we invested in Nordic Ren-Gas Oy. Thirdly, the value of Alisabank shares increased by 35% during Q4 '25, whereas half of the Taaleri biocoal development came via investment was written down came down in Q4. It should be noted, when looking at the table, that the fair value of the investment deviate from the book value in balance sheet depending on the basis of accounting. For instance, we consider Turun Tori's fair value is currently EUR 60 million, whereas its book value EUR 10.8 million. In other words, we consider each investment contains hidden value which is not visible in the balance sheet or P&L statement. Then finally a short outlook on balance sheet. Both balance sheet and equity ratio have remained strong. Total assets amounting to EUR 306 million and equity ratio to 73%. Total investments increased almost by EUR 20 million to EUR 227 million, accounting for almost 75% of total assets. Out of these investments, EUR 44 million were related to development capital, EUR 20 million to fund and other investments, and the remaining EUR 164 million to Garantia's investment portfolio. Total liquidity was EUR 51 million, including the unused revolving credit facility of EUR 30 million and overdraft facility of EUR 10 million. Taaleri distributed the second dividend tranche of EUR 7 million in early October. And the Board of Directors proposes that a dividend of EUR 0.30 will be paid in 2 instalments for the financial year 2025. Now Ilkka will present an outlook for 2026.

So outlook for '26. So starting with Private Asset Management. So Renewable Energy continuing earnings is expected to decline compared to '25, and that is due to the fact that subsequent management fees were recognized in '25. In addition to that, obviously, the timing of the exits for the old vintage funds will have a meaningful impact for the EV development. Then when it comes to other Private Asset Management, obviously, we are investing in that segment quite heavily at the moment, and therefore, the operating profit for '26 is expected to remain negative in other Private Asset Management business. Then Investment segment, profit will depend obviously, among other things, quite significantly how the fair value changes will develop. Then on the other hand, obviously, as well how we are -- how the timings of different exits will happen, if so, will happen during the '26. Currently, insurance revenue is expected to grow slightly in '26, and profitability expected to remain a stable level. With the given environment that we are operating, the investment fair value is expected to remain steady level as well in during '26. Finally, when it comes to the cost structure and the operating expenses, no major changes expected during the financial year, even though that we are targeting new initiatives and significant growth. With that, I will hand over to Antti Salmela, who is our Investment Director in Development Capital, who will walk you shortly through the Ren-Gas investment from the Taaleri perspective, and then followed by Saara, CEO of Ren-Gas, who will then present their view and the latest development of the Ren-Gas. Please, Antti.

Thank you, Ilkka. My name is Antti Salmela. I serve as an Investment Director at Taaleri. I'm responsible for the direct investments at Taaleri, including our development capital portfolio. I joined Taaleri at the time of the strategy update in August last year, and I've been doing private equity investments since 2007. And today, I'm pleased to introduce Taaleri's first development capital investment. And today, I'm joined by Ren-Gas CEO, Saara Kujala, who will walk you through the company and its plans in more detail. Shortly, from Taaleri's perspective, Ren-Gas is the leading e-methane project developer in Europe, so not only in Finland, but also on a wider context. And in December last year, Ren-Gas closed the financing round of EUR 16 million, and we were really happy to join the investment round. Ren-Gas has a strong group of Finnish and international investors -- existing investors, Allianz Global Investors and Suomen Tavara ja Raha, which is an investment company owned by Ilka Herlin. The existing investors joined the investment round and Taaleri and Tesi, Finnish Industry Investments are new investors who joined the company with this round. From Taaleri's perspective, the key reasons why we wanted to invest in Ren-Gas, that Ren-Gas' solutions are really accelerating the energy transition, and as a consequence, they deliver substantial emissions reductions. The industry is growing and the growth is driven by the regulation, which favors clean fuels, both in Finland and also on a European level. And finally, and most importantly, the Ren-Gas team is widely regarded as very experienced in the industry and also very ambitious, which is, of course, critical for us. With that, I'm happy to hand over to Saara, to continue with the introduction of the company.

Thank you, Antti, and thank you for having the opportunity to be here. So my name is Saara Kujala, and I'm the CEO of Ren-Gas. And first of all, of course, on behalf of the Ren-Gas, but also personally, I'm really happy to have Taaleri to join us and investor and partner on our journey. Currently, we are happy to say leading e-methane project developer in Europe, but of course, going forward, also the leading e-methane producer with our projects. Well, e-methane, very shortly, it's a renewable fuel that we will produce in our production facilities, first by producing renewable hydrogen, biogenic CO2; and combining these together, we have a molecule e-methane that actually has a similar benefits, similar chemical properties as biogas, but we tap into EU renewable hydrogen market, having us a very unique interesting business case, as we can also utilize the existing infrastructure, LNG trucks, where we will have this product as a fuel and also later on to the Marine segment. Currently, Ren-Gas has 6 e-methane projects in development in Finland. On the left-hand side, you'll see logos of our partners. These projects are Ren-Gas projects, but we collaborate closely with Finnish municipal energy companies where we source the CO2 that we need for the production process, but we also collaborate in utilizing the waste heat that are borne in our production process to have a no emission heating source for the cities. Currently, we are a team of 30 people. We are a strong team, as this is a new industry, but also we are preparing on having a long-term business case, as we will have competencies also to operate, maintain, optimize these assets over the long term, which is a very valuable service for the assets and wider for the hydrogen industry as well. About the investors, Antti already introduced them. So initially, in our previous financing round, we were preparing on taking the portfolio forward to a certain step with the funding from Allianz. And now with this recent financing round, preparing to, first of all, take the Tampere project to the construction phase and also enlarge the portfolio development and having also the next projects forward to the construction. The first project is located in Tampere, already in ready-to-build stage, nearing the investment decision, and 2029 is the projected first year of operation, where we will have our e-methane going through the gas pipeline network to the market. One of the very significant milestone in this industry is that before this project, we have already selected the key equipment suppliers, our EPC and partner, which is very important to having like a bankable operational model, good technologies that actually support the low-risk implementation of the project and the good business case going forward. Then finally, kind of the 2 last milestones that are very important for implementation of our plans. On the debt financing side, we already have a EUR 230 million loan framework Board approved at the EIB. And for the first 3 of our projects in Tampere, Lahti, and Kotka, we also have the subsidy elements in place since these first projects will still be quite capital heavy, so the ability to attract subsidies is a very, very important part of the business case. So I would say this is an overview on kind of the key milestones, who we are as a company, what are some of the kind of key assets that are pushing us forward and very happy to be working together with Taaleri, other investors and the value chain partners, to take first the Tampere and rest of the projects forward together.

Thank you so much to all of our presenters. Now we have time for a Q&A. And both Ilkka, Lauri, and Antti are happy to take questions either regarding Taaleri, our fourth quarter results or the investment in Ren-Gas. If we have questions here live, please use the microphone, so that everyone online can hear the question. And questions over the webcast platform can be submitted at any time.

We have a question from Sauli Vilen from Inderes.

About Garantia, the share of equity in your portfolio, it has historically been 10% to 15%. I think the long-term average is like 16% or something. Now it's close to 30%, as you said. Should we think this 30% as a new normal? Obviously, you have the balance sheet to do it if you want to.

Well, in their investment policy, 25% actually a neutral position. So they have been kind of underutilized the equity risk opportunity earlier. But now during the year, it has increased quite a bit. And at the end of the year, it achieved that almost 30% level because of the fact that the stock market has increased quite significantly. But there's no, I would say, expected any major difference because the kind of the policy has still remained the same. But obviously, the investment professionals kind of try to optimize the allocation, obviously, considering the risk and return opportunities in the market when it comes to fixed income versus the equity market.

Then about the Juhansuo, the bio plant there. Can you walk us through a little bit more detail the write-down? It was kind of a drastic one. You kind of cut your stake in half, which implies that the overall fair value of the plant has held overnight, basically. So yes, so can you shed some more light on this, like what was the -- like how big surprise of this energy issue, so to speak, were?

Yes. So the facility itself, like I said, it has been in a ramp-up phase during the year. And it has faced some technical issue, which is quite -- you could say that sometimes happen when you implement new technologies, and that has happened with Juhansuo case as well. So there is clear issues with the energy balance. And like we said, it requires additional investments to be operational. And we are -- and our people and our engineers are kind of investigating the opportunities currently with the service providers and technology providers, and that's the current status where it is at the moment, and yes, like I said, that's the kind of -- let's put it that way. That's the exact summary of that.

So in more detail, how are you going to refinance the operation? Obviously, it is through the co-investment vehicle, which I don't think has any major excess capital. So do you need to file in more cash? Or do you seek outside equity injection? Or how we should look at that?

That is under negotiations. There is -- obviously, there's external sources and internal sources and discussions ongoing at the moment, but that is under negotiations and depends also on the technical solutions that is then identified.

Can you give like any ballpark figures like how much investments the plant actually needs in order to ramp up on the phase? Are we talking single millions or like tens of millions.

Yes, single millions, most likely. So obviously, like I said, the technical solution is not yet finalized, but most likely as single millions.

Still like continuing this. I mean, we are talking about like single million investments, and they are -- what I hear from you, they are like these hiccups, so to speak. They are not like any super drastic things. As you said, they happen when you ramp up new technologies, but still you cut the book value of your investment in half. So I mean that implies much more drastic than what you had actually say. Is it just because of the leverage? Or why just the sort?

It comes -- obviously, comes from the, let's say, the financial principles and the kind of the uncertainty that is related to that investment because, obviously, as you said yourself, the entity as such has not that sort of financing kind of available at the moment. So it requires additional financing. And there is obviously, clear uncertainty related to that additional financing, and that's the kind of the background of that write-down.

Has this situation, so to speak, changed your view regarding the Canadian coal plant?

Well, the Canadian operations, the purpose of that was that we would be able to utilize the Juhansuo plant as a proof of concept and to utilize the same technology. Obviously, if there is then obstacles and difficulties with the existing technologies that will obviously, have an impact for the Canadian operations. But there are globally available other technologies as well, but -- and which we have already investigated. But obviously, we haven't made any decisions because we are still kind of trying to tackle the issues in Juhansuo.

Yes. And then one more for me. About the Ren-Gas investment, it was EUR 1.6 million in your balance sheet at the end of the Q4. I think the -- your stake is higher than that, obviously. So is it just that it will grow when the company needs capital, or how we should look at this?

Yes, it was EUR 1.5 million. And there's certain milestone that would trigger like payment -- additional payment.

It's Patrick Campbell from Nordea. Firstly, congratulations on the closing of SolarWind III, but perhaps looking ahead and reflecting your guidance, what kind of new funds will be in focus this year, and perhaps reflecting the Private Asset Management as a whole?

Well, well, all in all, obviously, it depends. I think it is the short answer. But when it comes to -- let's start with the renewable edge. Our target is to proceed already if things develop positively and favorably, our target is already to initiate SolarWind IV during the financial year, and at least kind of start the kind of the activities on that. Then if you take a look at the bio industry, that is still, like we said in the Capital Markets Day, the fundraising will not happen in '26, but the most -- our target is to finalize the investment period in '26 and then the fundraising will then initiate in '27 for the next vintage. In real estate, we are in the middle of different kind of phases of different project development when it comes to separate mandate accounts and when it comes to the new kind of new funds. But I think especially when it comes to the real estate segment and real estate market, we all know that it is quite sticky, the market situation there, and it depends on the LPs, how that will progress. When it comes to the new initiatives, like we have said, our target is to launch several new strategies from -- during the period '26 to '28. And let's formulate it that way that I would be quite disappointed if we would not be able to initiate any of those during '26. And that's the clear goal that we internally have.

Then maybe my second question related to performance fees. It seems that you didn't book any performance fees this year or last year. And maybe looking at this year and considering that some funds are in the exit phase, do you expect to book any performance fees this year?

Well, we base those every quarter, and that is -- those are recognized accordingly. So we haven't stated any, say, forward-looking statement when it comes to the performance fees, but that is kind of -- we take a close look on that every quarter, and it depends on the development of the funds, obviously.

Yes. Sauli from Inderes, if I may continue. About the Garantia's bond portfolio, can you remind us what is your running yield -- on there, like roughly?

That -- I don't have the exact number in my head. It had changed a bit during the year. So maybe I'm not giving any numbers because I would indicate...

Then about the outlook in the private -- on other private asset management, you are expecting operational loss there. I assume that is based on the assumption that you don't book any performance fees there, yes?

Yes.

Then again, on the outlook, if I read correctly on your renewable energy outlook, you are implying that you are planning to divest the older wind assets this year. Obviously, we know that the wind farm situation in Finland is kind of a difficult one. What gives you the confidence that the market situation actually improves during the year? I mean, at current states, as you have previously said, there is no point of divesting them as we speak right now.

Well, actually, we are -- those are in the market, obviously, and we are investigating the opportunities continuously. I think that -- I think there's -- let's say, there's a silent signals that actually the transaction market in the Nordics overall is developing more positively. I think we have already seen the bottom. And now I'm talking about the Nordics level and the kind of we faced a quite kind of difficult situation when -- especially in the Northern Sweden, they had the setbacks with those financial investments. But I think the market is -- and activity is picking up, and we are seeing already some assets moving in the market. even though that those are more related to Sweden and the distressed situation. But still, I think we are -- start to see that market is moving towards more active level on the renewable energy exit market as well.

Then finally, about the bioindustry fundraising outlook. I mean, you obviously have had some difficulties in the fund itself with some of the larger investments there. Now you have difficulties with the Juhansuo basically, which was supposed to be like a reference case, so to speak. So do you -- how do you -- and in top of that, the market situation is obviously super difficult in that sector at the moment. So how do you see the fundraising outlook overall currently?

First of all, it's good to make the difference between the biocoal and the Fin investments and the fund operation as such because the fund strategy is related to bio-based or recycled materials mostly. So that is investing in a kind of different asset category, that it's not investing in bioenergy as such. So that shouldn't be kind of understood to have a major link between those different categories. Actually, if you take a look at the underlying development, and obviously, when we have now -- as we published last year, we took the Tier 2 and Tier 3 and in-sourced that activity, and we have more and more dialogue with our LPs and our investors. And actually, I think the -- even though that you said that it's not kind of -- that the market is facing difficulties, we see actually that the LPs are seeing -- some LPs are seeing quite attractive market due to investing at the moment. The kind of the -- let's put it that way, that the valuations actually are quite attractive at the moment. And the underlying factors when it comes to the climate change and need for replace the fossil-based material, that kind of assumption or the overall market has not changed at all, but I think it is actually developing and there's more companies coming up on that market in the Northern Europe level.

Then finally, I'm not sure if this is for Antti or Ilkka, but about the -- your investment pipeline, so to speak. And obviously, I think in the report, you stated that you have some stuff there. But can you open a little bit more, like how much activity is going under the hood, so to speak? Like, how much capital deployment should we expect, for example, next 12 months or so?

I can maybe start and Antti can then continue and fulfil if I'm saying something completely incorrectly. But I think that we are actually seeing that there is a clear demand for this kind of investments in Finland, especially. There's clear market position that we have possibility to take. And that's what Antti continuously communicates to me as well, that when Antti is having a dialogue with so-called market, there is -- there's not that many companies that are doing this sort of minority stake investments in a growing companies and in a sector-agnostic way without having a set timeline of the investments. And that has actually created quite a strong pipeline, and there's a lot of opportunities. Obviously, like I said, from the strategic perspective, it's a capital allocation tool for us, and we have to kind of balance the investment between the portfolio or the Private Asset Management and the development portfolio, and that's the -- that's the job that we are doing. But maybe you can elaborate a bit.

I can confirm that the pipeline -- deal pipeline is really happy. It's very healthy. And given the short period of time after the strategy update, it seems that the strategy is working very well. So our aim is to be a co-investor with international investors, like in the Ren-Gas case. We are co-investor with Tesi, like in the Ren-Gas case, and we are a co-investor with other institutional investors and we nicely kind of complement the Finnish equity capital markets structure. So the pipeline is healthy. And as you said, we have not any kind of goals about the speed of the deployed capital, which gives us room to be selective and tap the good opportunities. And also, we are -- like I said in the Capital Markets Day, we are currently looking at possibilities to invest also into existing companies, which is naturally might be really attractive, given we know the companies, we have been affecting the strategy and we know the management and we know the outlook. So that's also something we are currently looking at.

We have a few questions online as well. So first, we have Elsa Brismar from DNB Carnegie, who is wondering about the outlook for Garantia. So do you see that it's possible to take on even more market share? Or do you believe that growth will primarily be with the market?

Well, yes, I think we have opportunity to increase market share, both in corporate loans as well as in the mortgage loans as well. But like always, when it comes to Garantia, it's all about risk management. So they are operating in a certain kind of operating envelope and risk envelope. And as long as we stay there and keep our risk management quite tight, that kind of still we believe that we are able to increase the market share within that risk category without increasing our risk taking significantly.

What is your perspective on the housing market in Finland? Will '26 be the year of a final turnaround?

Or if I would know that. But anyway, I think we have seen -- I think more and more, if you read the statistics, if you read the articles and the news when it comes to real estate market, I think net result of that is that we are seeing slightly real estate market moving towards more and more positive territory. And that also applies to housing market. And we have seen lately quite significant transactions, which are not housing market as such, but quite significant transactions when the international investors have entered in the Finnish market and have made a big transaction in the real estate market. And that historically, at least, has been a good proxy for the turning point when the positive market development typically has started when the international investors enter the market.

Thank you. Do we have any further questions either from the floor or online? If no further questions, we are now almost at the top of the hour. So I would like to thank all the presenters, and then also for everyone listening, both over the webcast platform and for you here in the room with us for your time. Wish you all a pleasant rest of the day. This concludes the webcast.

Thank you.