Episode 94 · 2021-08-14 · 55:12 · Original in Finnish
Private Equity | Pia Santavirta | Negotiator 94
Originally published as “Pääomasijoittaminen | Private Equity | Pia Santavirta | Neuvottelija 94”
Pia Santavirta, chief executive of the Finnish Venture Capital Association, sets out the structure of Finland's private capital market and its rapid professionalisation: sixteen new venture capital funds in five years, a record year of nearly a billion euros in startup investment during the pandemic, and roughly half of the new companies on the Helsinki exchange coming from private equity ownership. The episode's most concrete passage is an anatomy of advocacy — the double taxation of funds-of-funds prevented foreign investors from putting money into Finnish funds, and the fix was initially limited to European players until a single phone call extended it worldwide. Santavirta also explains why private-equity-backed listings have outperformed the market, what ESG requirements mean for access to financing, and why she published the industry's diversity figures even though they were poor.
Core theses
- The funds-of-funds double taxation is the cleanest case study in the episode: one tax provision was keeping foreign capital out, and removing it changed the flow.
- A fix drafted for European investors only, extended worldwide by a phone call, is what effective advocacy actually looks like in practice.
- ESG has moved from a preference to a condition of access to financing, which changes who it binds.
- Publishing bad diversity numbers is a choice, and it is the one that makes the following years measurable.
Watch and listen
Key moments
- 00:00 — The highlights of the episode
- 00:57 — The guest is Pia Santavirta, chief executive of the Finnish Venture Capital Association
- 01:44 — Sneaking into Slush, and a call from Tuomas Lang
- 04:16 — Angels, venture capital and buyout: the structure of the field
- 06:14 — VC returns, and sixteen new funds in Finland
- 08:49 — Foreign capital, and the size of Finnish funds
- 10:45 — Money stays as fuel for growth; the talent shortage is the next bottleneck
- 12:29 — The association's aims: communication, advocacy, developing the sector
- 14:38 — The double taxation of funds-of-funds was dismantled
- 16:51 — EIF money, and competitive regulation for Finland
- 19:04 — Private-equity-backed listings perform better
- 21:44 — Anchor investors and family offices working together
- 23:44 — ESG and impact: does it improve returns
- 26:50 — Access to financing requires ESG work
- 28:45 — Following EU regulation, with Finland ahead of it
- 31:33 — The next generation builds impact into the core of the business
- 34:07 — The Covid crisis: Venture Bridge and a record year
- 37:26 — Digitalisation accelerated and investments were made remotely
- 39:02 — Buyout invests in Finland, foreign capital takes the next stage
- 40:21 — PHM and Kotikatu: the nerve to grow by acquisition
- 41:34 — Norvestor and Verdane bring an appetite for internationalisation
- 44:42 — An accelerator bringing young people into private equity
- 47:46 — Women in private equity, and publishing the diversity figures
- 50:50 — Wealthy women as investors and role models
- 53:19 — Women in STEM, and healthy audacity
- 54:41 — Thanks and closing words
Summary
Pia Santavirta, chief executive of the Finnish Venture Capital Association, sets out the structure of Finland’s private capital market and its rapid professionalisation: sixteen new venture capital funds in five years, a record year of nearly a billion euros in startup investment during the pandemic, and roughly half of the new companies on the Helsinki exchange coming from private equity ownership. The episode’s most concrete passage is an anatomy of advocacy — the double taxation of funds-of-funds prevented foreign investors from putting money into Finnish funds, and the fix was initially limited to European players until a single phone call extended it worldwide. Santavirta also explains why private-equity-backed listings have outperformed the market, what ESG requirements mean for access to financing, and why she published the industry’s diversity figures even though they were poor.
One tax provision, one flow of capital
The funds-of-funds passage is the most instructive thing here because it is so specific. A double taxation rule made Finnish funds unattractive to foreign investors; removing it opened the flow. Advocacy usually gets described in generalities, and this is the version with a mechanism in it.
And then a phone call
The fix as drafted covered European investors only, which would have left most of the world’s capital outside it. One call extended it. That detail is the part practitioners should keep — the win was in the scope, and the scope was nearly lost by default.
Publishing the bad number
The diversity figures were poor and she released them anyway. Whatever follows, the subsequent years are now measurable against a stated starting point, which is more than most industries arrange for themselves.
Watch
The recording lives on the Neuvottelija channel: Pääomasijoittaminen | Private Equity | Pia Santavirta | Neuvottelija 94. A Finnish edition of this episode is published at www.neuvottelija.fi.
In depth
The Neuvottelija AI editions carry a long-form write-up of this episode: English · suomeksi.
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People and topics
Guests: Pia Santavirta
Topics: Ownership, Capital & Tax Investing & Markets M&A & Exits