The City of Mikkeli’s €90 million investment portfolio was created following the sale of an energy company in 2024. To manage this wealth, the city first established an investment policy and foundational investment principles. After that, an asset manager selection process was carried out, and the most suitable service providers were chosen to implement the investment operations. Today, Mikkeli monitors its portfolio—divided among three asset managers—through a regular consolidated investment report.
We at SFR Advisors have had the honour of being a trusted partner on this journey. We interviewed the city’s Chief Financial Officer, Tiia Tamlander, and Financial Planning Manager, Janne Skott, to to share their thoughts on the journey and how the collaboration has worked so far.
What is the background of Mikkeli’s investment assets?
In 2023, the City of Mikkeli made a strategic decision to sell 49% of its wholly owned utility company, Etelä-Savon Energia Oy, to a new ownership partner as part of its financial balancing measures. Part of the proceeds from this transaction was used to reduce the city’s debt, while the remaining portion—approximately €90 million—was allocated for investment.
Tiia explained that the goal of the investments was to create financial security and generate future cash flows to help fund municipal services. By paying off debt, the city was also able to lower its exposure to interest rate risks.
Why did you choose to involve an external expert, and how was SFR Advisors selected for the projects?
Tiia explained that it was important for the city to work with an external professional, as this was a completely new area for them and involved significant risks. It was clear from the start that external expertise was needed to ensure that everything would be done thoroughly, professionally, and correctly.
SFR Advisors was selected through a public tendering process to assist in preparing the investment plan and conducting the asset manager selection. In addition to the official tender, Tiia also sought feedback from other cities that had purchased similar services. SFR was later chosen to provide reporting services when the city realized the need for impartial comparison between managers, monitoring compliance with the investment plan, and assessing the overall investment operations.
How did the investment planning process go?
As the City of Mikkeli had no prior investment operations, both the investment principles and the investment plan had to be created from scratch. The collaboration began in June 2023 with planning meetings and rounds of feedback organized between SFR Advisors and the city. The project was completed in early autumn 2023.
Tiia stated that the greatest benefit of working with an external partner was gaining access to an expert with deep knowledge of both the asset management field and investment-related topics. SFR Advisors had a strong starting point for the plan, which was then tailored together to reflect the specific needs of the city. According to Tiia, this was a well-suited approach and ensured that all of the city’s needs were comprehensively addressed. “The support we received from SFR Advisors was essential in preparing and finalizing the core documents forming the foundation of the city’s investment operations,” she added.
How did the asset manager selection process go?
The selection process began later in the same autumn, and cooperation with the chosen asset managers officially started in June 2024. According to Janne, the entire project went smoothly, with continuous communication ensuring that progress aligned with the agreed goals and criteria. He mentioned that with SFR Advisors’ guidance, they were able to define criteria that were truly tailored to Mikkeli’s needs.
The process also included interviews with service providers, which Janne said added valuable depth to the project. The interviews were well-organized and scheduled, with SFR Advisors supporting the city throughout by providing follow-up questions and comments. It was crucial for the City of Mikkeli that the selected managers fully understood their position as a new investor and that communication would be clear. Meeting the providers face-to-face before making decisions was, in Janne’s view, very important.
How does consolidated investment reporting support your work?
Once the city’s investment operations and partnerships with asset managers had begun, Mikkeli needed to track the development of its portfolio and report on it to its stakeholders. The city decided to acquire SFR’s consolidated reporting service to support these needs.
According to Tiia, the greatest added value of SFR Advisors’ reporting service is that it presents a clear, comprehensive view of Mikkeli’s investment activities. The report also enables comparisons between the different asset managers. Monitoring three asset managers independently would likely be a time-consuming task, as each manager provides their own type of report, making them difficult to compare.
Tiia emphasized: “Since we are dealing with large public funds, it’s crucial that everything is done correctly.” The professionally produced consolidated report and summary by SFR Advisors also enhance credibility when reporting investment activities to, for example, the city council. SFR Advisors has also participated in presenting the reports to city decision-makers and has been able to answer their questions directly.
How has the collaboration with SFR Advisors gone?
Tiia described the collaboration as open and dialog-driven, which enabled all key aspects for the City of Mikkeli to be taken into account during the projects. No major issues arose, and SFR Advisors always responded quickly to any schedule changes.
According to both Tiia and Janne, working with SFR Advisors was smooth, professional, and easy. Janne noted that the firm’s initiative in driving projects forward stood out throughout the collaboration. As a client, they never had to worry or follow up—everything progressed as agreed and on schedule. Janne added that SFR Advisors is a well-known provider in the asset management sector, which further increased their confidence in the process and made them feel the city was in good hands.
What advice would you give to other investors in a similar situation?
Tiia encourages others to seek expert help without hesitation if the topic is new. These kinds of processes often involve significant sums of money, and having a professional involved brings confidence and peace of mind that everything is done correctly. Especially when starting from scratch—as was the case for the City of Mikkeli—it is essential that the foundation documents are carefully crafted and thoroughly considered. Janne added that even if you have some experience, it’s not worth doing everything alone, as these types of projects often require very specific expertise. It’s always wise to bring someone in to support the process.