Evli reported a solid result for 2022 in a very turbulent market. We sat down with CEO Maunu Lehtimäki to reflect on the year that has passed and what lies ahead.
After over 30 years in the business, was 2022 the weirdest or toughest year, or perhaps both?
Well, we humans tend to overstate the most recent events as the most extraordinary ones. Having said that, I would still concede that I haven't seen anything like 2022 before: starting with Russia's invasion of Ukraine, causing immense human suffering, followed by an energy crisis, accelerated inflation and fast-rising interest rates.
2022 will be remembered as the year when interest rates came back on the radar. How will this change the game?
I think the development with the interest rates should be viewed against the backdrop that money without a price is an atypical situation. Although we all feel the crunch, in a lot of ways it's a healthy crunch. Artificially cheap money distorts the markets. We are going back to the fundamentals, and I think it's a good thing. And we should not forget that rising interest rates comes with opportunities too.
So yes, this has been a weird and tough year on several fronts. Even the weather has been weird and fickle, which is serving as a constant reminder to us all that we need to focus on the global challenges we have in climate change and biodiversity. As we manoeuvre short-term challenges, we need to keep our sight steadfast on the future as well and act with foresight. We need to take the long view and collaborate on a totally different scale than before.
How do you see your role as a wealth management firm in tackling these challenges?
Well, we sit on a lot of money, EUR 16 billion to be specific. Our role is to maximise our clients' returns, but as wealth managers we also have a responsibility to allocate these assets responsibly. There are a lot of investment opportunities within the green transition, and our alternative investment funds are a great way for investors to take part in that transition. Last year we also successfully closed our Evli Impact Forest Fund, giving our clients an opportunity to invest in the world’s leading forest funds globally. Forests are in a key position for lowering the carbon footprint and reducing the effects of climate change.
In the end, responsible investing needs to go beyond ESG towards truly integrating sustainability in every investment decision. Who can make money in the long-term in a world ridden by climate catastrophes and geopolitical upheaval? Not paying attention to these questions today is bad risk management. Our role as resource allocators is to help our clients juggle their individual goals with what is good for the planet. It requires foresight.
So 2022 was a weird and rough year. What is your take on 2023? Will it get any better?
We live in a very uncertain world with bad visibility, but I remain an optimist. Rising interest rates will likely send at least Europe into a recession but hopefully it will be mild and not too long.
We are returning to normalcy in many ways, and it's mostly a good thing. I think we have seen the bottom when it comes to the share markets, but I also think that investors need to accept that previous bull years’ returns may be as good as they will ever get, and that we are now returning to levels that are closer to the average returns. In some ways, this can make it easier to predict the future. Having said that, in a world ridden by geopolitical upheaval, rising protectionism and polarisation-infused unrest, uncertainty is bound to persist. As for Evli, I look at the future with confidence. We have successfully integrated EAB Group Plc into our business, have a solid future-facing offering and are well poised to help our clients navigate this uncertain future.
Read more about Maunu Lehtimäki’s thoughts about the past year in Evli’s Annual Report 2022.
Read also a news article "Evli has published its Annual Report 2022".