University of Turku investments
The University of Turku is a long-term investor. The aim of the University's investment activities is to ensure that the University's assets are invested in an appropriate and sustainable manner.
The investment portfolio of the University of Turku is managed as an entity. It consists of the University's equity and reserves, the donations received by the University and the matching funds that the donations have generated from the state, and retained profits from previous years. In its investment activities, the University follows the principles approved by the University Board.
The return of the University’s investment activities is spent on fostering the aims of the University’s strategy, in accordance with the guidelines set by the Board.
Key figures of 2024
- Investment assets without direct property investments on 31 December 2024: 258 million €
- Return on investments (ROI): 14.4%
- Net return without changes in fair value: 20.2 million €
More information on the University as an investor
All items on the University's balance sheet that are classified as investments are generally considered to be part of the University’s investment portfolio.
The University's investment assets are further divided into two portfolios:
- A long-term portfolio whose purpose is to reach its profit target within the limits of the accepted volatility level, and
- A liquidity portfolio whose purpose is to ensure the University's cash flow under all circumstances.
In addition, the University’s direct property investments are followed up and reported separately.
The return on investments is monitored regularly. In investment activities, the minimum goal is to perform on a par with the comparative indices. According to the spending policy approved by the University Board, starting in 2024, the long-term portfolio's (ca 90% of the total assets) annual profit target is 6% and the liquidity portfolio’s (ca 10% of the total assets) annual profit target is 1%. Thus, the annual total profit target is approximately 5.5%. The annual profit target of the direct property investments is 3%.
Allocation refers to diversifying investments between different types of assets. Based on the allocation decision, investments are made in different types of assets while aiming at efficiently controlling the risks related to investment activities.
The long-term target allocation of investment assets and its fluctuation range are as follows:
- Listed shares: normal weight 40%, fluctuation range +/- 15%.
- Investments in real estate (other than direct): normal weight 3%, fluctuation range +/- 5%
- Bond funds: normal weight 20%, fluctuation range +/- 15%
- Alternative investments: normal weight 30%, fluctuation range +/- 10%
The long-term portfolio includes the University’s long-term investments and illiquid assets, such as:
- Share and fund portfolios managed by designated assets managers
- Index funds
- Shares in Finnish companies
- Permanent and changing property investments
- Alternative investments (Private Equity, Private Debt, wind and solar power, etc.)
As expressed in the spending policy, the University’s view is that certain illiquid long-term investments in selected assets (e.g. certain property investments, alternative investments) yield more than entirely liquid investments. In order to ensure the University’s cash flow, the University possesses a sufficient amount of liquid investments to counterbalance the more illiquid investments.
The liquidity portfolio is actively managed and consists of
- Bond funds
- Investments in money market instruments
Direct investments in shares are only made in domestic shares. Other investments in shares are made through funds. The University does not use derivatives, nor does it invest in funds that use derivatives as direct investments. Designated asset managers can use derivatives for protecting their own investments.
The University is a member of FINSIF - Finland’s Sustainable Investment Forum r.y, and it follows the principles of sustainable investing in all of its investment activities.
The investments’ sustainability is monitored through corporate sustainability reports, other public sources, and databases that provide information on the assessment of sustainability.
The University requires its asset managers to report regularly on their ESG indicators (such as Global Reporting Initiative).
The Rector has the highest jurisdiction over the University's investment activities. The Rector approves the investment plan and oversees that it is carried out. Chief Financial Officer Siru Helminen is responsible for the practical measures.
The Investment Committee is appointed by the University Board to support the University's investment decisions.
The members of the Investment Committee from 1 January 2024 to 31 December 2025 are:
- Ritva Viljanen (the University Board), chair
- Matti Rihko, expert
- Tuomo Lähdesmäki (Turku University Foundation)
- Mikael Luukanen (Turku University Foundation)
- Mika Vaihekoski, professor (from 1 January 2025 onwards)
The Rector attends the meetings, and the Chief Financial Officer acts as the committee's secretary. Representatives of asset managers can also act as experts.
The spending policy defines how large portion of the total return of the investment activities can be used annually and in the long term for the University’s core operations. Use of funds must never lead to a permanent reduction of the University’s investment assets nor to purposefully increase the University’s assets as a result of a too cautious spending policy. Finding a balance is the aim of the sustainable use of funds.
The return of the portfolio is spent on promoting the strategic goals of the University of Turku, in the manner specified by the University Board and Financial Regulations. The return or part of it can be distributed annually or left untouched. The long-term minimum goal is to retain the real value of the investment portfolio.
