Aalto Finance Alumni Conference

Markus Mäkelä

One of the development actions that Aalto Finance Alumni had planned for 2023 was to offer more contents related to work substance to members. The primary effort on that front was to establish an Aalto Finance Alumni Conference (AFAC), which will now be organized as a going concern – next in Autumn 2024.

Although our initial registration goal was 80 Aalto finance alumni, the final quota of 100 was fulfilled in 1.5 days in June – four months before the event – and a large group participated on October 11. Our topic at the main hall of Bank was M&A and our event was co-located with Aalto’s larger M&A event, having an AFA-specific part and a larger and longer joint part.

AFA’s chair, Roope Lääkkölä, hosted AFA’s session. “It was exciting to see so many diverse alumni together, clearly enjoying the informative, entertaining and top global quality content,” Roope says. “I’m proud and happy that the determined work from all organizers led to such a strong success.” Our joint event was maybe a top M&A speaking events for alumni from broadly many age groups, and surely a leader among alumni co-organized events.

To sum, it was a very inspiring start, to which AFA contributed a lot of work.

AFA’s Chair Roope Lääkkölä welcomed the finance alumni in AFA’s own preliminary coffee-and-sandwiches event, where also Lauri Vaittinen from Mandatum spoke for the first time.

M&A is a key in the “flux” of economies now

M&A will be the conference topic still during 2024. And it appears to interest the young alumni like it does older alumni, and there are good reasons: sectors of the economy are in a flux in these times, caused by both AI and industries’ transformation due to other megatrends, like “reshoring,” demographical changes and other changes to value chain configurations. M&A, together with Divestitures, is one of the few crucial ways of realigning and tweaking corporate scope (what service and product lines it offers) with the needs of value creation in the 2020s.

AI and M&A are, moreover, fascinatingly intertwined. Although most parts of how AI will transform financial professions (even further) will come via work process streamlining, in M&A work, the transformation comes also via shifting (e.g. clients’) corporate strategies: AI will enable some more corporate diversification “with good cause,” as I say: a degree of diversification where masses of well-managed data can actually bring significant economies of scope to those who can muster enough of true skill to deploy AI sensibly across selected business processes. And, no need to say it: M&A is a driver in the diversification toolbox.

Top experts spoke about how value and strategy go through the M&A process

Together with Aalto, we had the chance to host true international-class speakers, from both the practitioner side and academia. All have a lot of experience under their belt, and it wasn’t the first time when they share it (a majority had, for example, published in the Harvard Business Review, the MIT Sloan Management Review, or the Journal of Financial Economics.

First to speak in the main event was international management professor Thomas Keil from the University of Zurich, an expert in strategy, M&A, and company leadership teams. We then heard from two Bain & Company partners.

Prof. Thomas Keil spoke incisively about M&A and strategy.

Ted Rouse, a truly leading M&A consultant globally, used to be head of Bain’s M&A practice for many years, and likewise member of Bain’s board of directors. Having been a leader also at a few other global Bain practices, having worked at four offices in three countries, and after 35 years as a partner, he came and brought his experience to bear. He spoke together with Pyry Vauramo, a Bain partner from Helsinki, who has studied finance and participated working for over 100 M&A transactions, with a particular focus on the technology sector.

Read more about Ted Rouse and his expertise from the next Aalto University Magazine.

Lauri Vaittinen, CEO of Mandatum Asset Management and an AFA member and active alumnus, spoke about the implications of financial conditions for M&A activity. Mandatum was very, very timely, having been listed just the previous week. An article on Lauri and his career and further thoughts was published in AFA Quarterly 4/2021. Some of Aalto’s best-known people were speaking as well: provost Kristiina Mäkelä opened our event, which professor Vesa Puttonen chaired, with excellent dialogues with speakers afterwards.

Read more about the speakers’ contents from the insert.

Ted Rouse

Vesa Puttonen

Comments and views from the increasing AFA membership

Several AFA people spoke with us either in the event, afterward, or via Aalto’s feedback form. Most of the feedback is simply very positive and just gave many thanks (and we are thankful back). However, we also received valuable topic ideas for 2024 and wishes to have even more time to talk with friends and others (to add to current 1h 30 min) – we will try.

One of the event’s goals for AFA is to acquire yet more of mid-age alumni to the AFA membership and make it possible to gradually foster acquaintances across age-group borders, too. This started out very well in 2023: a half of the finance alumni who registered were aged 35–52.

Join us next year – and please tell your study friends

As mentioned, M&A will still be the key topic in 2024. We will be in the intersection of finance, AI, and strategy, and value.

If you are a young alum and thinking about your career, M&A process expertise can provide substantial career capital – in one or two ways. First, if you’ll work with M&A directly at some point – be it at private equity, investment banking, management consulting, or corporate development or leader roles – it is core knowledge. Second, if you work a bit further away – say, as a security analyst, in trading, or in other corporate or consultancy roles – you will benefit of it.

The audience seemed to be captivated in Bank’s main hall. Later, we got a number of comments about the interesting nature of the talks.

Photos: Kadir Kumral, AFA

Hence, next year: register and come!

It should be a very comfortable occasion to connect with also study acquaintances, also by asking them to join.

Do send a message or call us, e.g. Roope Lääkkölä as AFA Chair, if you’d want to be involved in organizing this next year. One possibility is to work in AFA’s Board, too!

The conference topic was the process and broader economic connection of M&A

Most contents focused on how value creation should be top on the mind of M&A practitioners – whether advisors or those working in the M&A player companies.

Professor Thomas Keil spoke about the value and usage of strategy within the M&A process.

• When a corporation buys another business strategically, that business must suit the acquirer’s current business with synergy. The target needs to fit the acquirer and needs to be able to connect in a value-adding way. The premia involved in purchases of listed companies are a major reason for the need of large synergies.

• For financial acquirers on the other hand, strategic understanding is still very important: it allows them to craft a high-quality investment thesis and value-creation plan. Private equity investors will require executives to put the plan to work operationally – and will monitor closely.

• Prof. Keil spoke of five keys to success, including preparation, emphasizing the need for clarity of strategy and for building M&A capabilities such as pipeline management, strong internal decision processes, and a cadence sometimes called time pacing.

• The M&A cases were interesting, including the recent and highly-publicized purchase of the banking problem-child of Switzerland, Credit Suisse, by competitor UBS, and JP Morgan Chase’s acquisitions of Bear Stearns’s business and recently First Republic. Further examples came from software and manufacturing.

Ted Rouse and Pyry Vauramo’s topic revolved around the interplay of strategic due diligence and the integration process – showing how also these process phases should permeate value creation based on clear strategy.

• We saw a recent global Bain survey to M&A professionals, whose results attest that clear strategy, clear value-creation plans, high-quality due diligence, and well-aligned integration plans and execution are topmost important factors for M&A success. Coincidentally, this research pointed – really precisely – to that set of factors that were months ago selected as the conference presentations’ topics!

• New approaches to M&A are needed due to e.g. disruption, scope-increasing deals, and increased competition for good deals (as an editorial point: many private equity funds now have too much of “dry powder” – capital committed by limited partners but unused by PE investors, as good targets aren’t found).

• The Bain partners bore out the need for solid strategy also from the viewpoints of the process phases they spoke about. The carryout of the M&A process needs to facilitate commercial and operational excellence.

• They spoke in light of seven common archetype situations that enable strong investment theses. Vivid examples from U.S., European and Latin American companies in industrials, beer, and airlines illuminated this.

Toward the end of speeches, we looked at the big picture of M&A, rising above the process phases discussed above. Lauri Vaittinen, a long-term friend of AFA from Mandatum, told about developments on the long term in commercial banking indicators and in various private equity indicators, such as fundraising, exits, returns, and where and how PEs create value. Valuations and debt availability would favor limited usage of leverage in PE deals. Mandatum was a very fitting speaker choice also as AFA’s partner company.

Markus Mäkelä, M.Sc. (Econ) 2001, is a Board Member of AFA.