innish Industry Investment provides growth capital, expertise and networks for its portfolio companies. Our area of expertise is corporate governance, which we bring to our portfolio companies in collaboration with the management and as board observers. Companies in our investment portfolio represent a wide array of industries, so any industry expertise that is needed at any given case will often be found from our investment partners and from our extensive network.
The Finnish Venture Capital Association recently published a study conducted by Aalto University that analysed the value-adding mechanisms of private equity investors in Finland. The focus of the study in particular was on the intangible resources that private equity investors use in addition to the invested capital to promote company’s growth and development.
According to the study, private equity investors work adaptively, supplementing the expertise shortcomings of their portfolio companies while supporting company’s own strengths. In practice, this is realized by bringing in a systematic and methodical approach of operational management and development to an early-stage company, or, respectively, by bringing in an entrepreneurial approach to an established, more advanced company.
The expertise needed is not always found from the private equity investors themselves; rather, it is extracted from the private equity investor’s network. In practise this means that the private equity investor places an external expert with strong and relevant industry background as its representative on the company’s Board or as a senior advisor for the company. In some cases, a separate advisory board comprising of several industry experts might be formed.
The significant added value a private equity investor produces also comes from the fact that portfolio companies are selected carefully on the basis of a diligent analysis base on solid professionalism and experience. This ensures that the always limited financial resources go to the best companies with the most growth potential.
Finnish Industry Investment’s financing is based on market-driven terms and is invested in companies always alongside private capital. In addition to growth capital, valuable experience and expertise is made available for the companies by private parties to complement the company’s own expertise – together they provide a powerful engine for growth.