Tesi’s latest fund-of-fund KRR IV raises 165 million euros from major Finnish institutional investors

5.2.2020

Helsinki, Finland - Tesi, with commitments from major Finnish institutional investors Keva, VER, Ilmarinen, Elo and LocalTapiola has raised fund-of-fund KRR IV to continue the successful work of its predecessors. KRR IV invests in Finnish venture capital, growth and selected buyout funds and its fund size at first closing is 165 million euros. It targets to invest in 10-14 funds during 2020-2025.

Alongside Tesi, KRR serves as an anchor investor in Finnish venture capital, growth and small buyout funds. Its investments catalyse a substantial amount of private capital into the funds. KRR’s share of all commitments in a fund is max 40 % with its individual commitments being typically 5-15 million euros in size.  

KRR invests in funds whose investment professionals have the best capabilities to develop portfolio companies further through their expertise and networks. KRR expects its portfolio funds to invest responsibly and take responsible investment policies into account in investment processes and fund management.

Matias Kaila, Director for Fund investments at Tesi comments: “Finnish technology companies raise the most venture capital in Europe in relation to GDP, which can be seen in larger financing rounds than ever before. During the past 10 years the KRR funds-of-funds have played a significant role in catalyzing funds to the Finnish market, by investing in dozens of Finnish venture capital, growth and buyout funds. The concept has attracted Finnish pension funds to channel their funding to SME’s, while providing them with competitive and responsible returns.”

Investments in 30 funds to date

KRR I, KRR II and KRR III have invested in 30 venture capital and small buyout funds to date. In 2009-2018, these funds invested in 227 companies that generate 3,2 billion euros in revenue and employ 19 000 people in Finland.

The KRR funds-of-funds have invested in approximately 25% of its deal flow in Finland. Tesi expects the dealflow to increase in the coming years, which will enable KRR IV to continue sustaining high quality, balanced and diversified portfolio. 

Responsible returns

In addition to lucrative returns, KRR funds-of-funds expect its portfolio funds to operate in a responsible manner and make a positive impact on society. The funds are in different stages of their investment periods, but the aggregated IRR of the KRR funds is currently at 11%.

KRR expects its portfolio funds to commit to responsible investment as well as provide training to its personnel on the topic. In addition to a traditional risk management approach, the focus should be on increasing value for investors through investments in responsible businesses.

For further information, please contact:

Matias Kaila, Director, Fund Investments
matias.kaila@tesi.fi, +358 40 720 1324

Tesi (Finnish Industry Investment Ltd) is a state-owned investment company that wants to raise Finland to the front ranks of renewed economic growth by investing in funds and directly in companies. We invest profitably and responsibly, together with co-investors, to create the world’s new success stories. Our investments under management total 1.2 billion euros. Ambition for ownership and success -www.tesi.fi | www.dtg.tesi.fi| @TesiFII