OP Financial acquires second part of Suomi’s portfolio

The acquisition of €1.3bn worth of assets included stakes in at least 11 private equity, real estate and private debt funds.

OP Financial Group, Finland’s largest financial group, has acquired a portfolio of fund stakes from Suomi Mutual Life Assurance Company as part of the Helsinki-based insurance firm’s wind-down of its operations.

The deal, which was agreed last August, involved the transfer of €1.3 billion worth of assets that cover the liabilities of Suomi’s life insurance portfolio, according to Sami Jormalainen, a senior vice-president at OP.

UK regulatory filings show the deal included stakes in at least 11 private equity, real estate and private debt vehicles, including funds managed Partners Group, IK Investment Partners and SL Capital Partners. The transfer occurred on 1 January.

“OP was the natural partner for the transfer because we have been managing the insurance portfolio for 10 years,” Jormalainen told Secondaries Investor. “[Suomi] had outsourced the customer service and insurance operations to us, and the transfer underpins our growth targets in both wealth management and non-life insurance.”

The deal is the second stage of Suomi’s disposal of its assets. The firm had launched an “in-depth change process” in response its poor performance in 2002 and began winding down its operations around 2005, citing a decrease in solvency capital due to a continued fall in its share price, according to its website.

In December 2014, Suomi transferred its group pension portfolio to Helsinki-based Mandatum Life Insurance Company, including stakes in at least eight alternative assets funds.

OP and Suomi are now in talks over the transfer of Suomi’s remaining individual pension insurance portfolio, worth around €3.2 billion, and a plan for the deal will be presented to shareholders in the spring, according to a statement.

As of 30 June, Suomi allocated 3 percent of its portfolio to alternative investments, including private equity funds, and 3 percent to indirect real estate holdings.

A spokesman for Suomi confirmed the firm had transferred the 11 fund stakes to OP.

Some of the funds included in the deal are:

Candover 2005 Fund 2006 €3.5 billion
ECI 8 2005 £255 million ($364 million; €327 million)
European Fund Investments II 2001 €88.4 million
Frogmore Real Estate Partners 2006 £330 million
Industri Kapital 2004 2004 €825 million
MCH Iberian Capital Fund II 2003 €160 million
Nordic Mezzanine Fund III 2009 €240 million
Partners Group Asia-Pacific 2007 2007 $594 million
Actis Emerging Markets 3 2007 $2.9 billion
European Strategic Partners 2000 €868 million
European Real Estate Debt Fund 1 2011 £300 million