Interview with Kalle Kekkonen

Juha Kivistö

Could you tell us a little about yourself and your path to studying finance? 

Absolutely. I grew up in Helsinki, where I have lived my entire life. When deciding on my next steps after upper-secondary school, I was considering both the School of Economics and medical school. I had seriously considered medical school, but ultimately realized chemistry and physics weren’t my strengths. I wasn’t entirely sure what I wanted to do, but the School of Economics offered many opportunities, so I chose that path. I felt it would provide a solid foundation and numerous interesting opportunities for the future.

During my first year of studies, finance courses presented great challenges and covered engaging topics. Additionally, the competitive nature of securing the major was compelling. In retrospect, I made the right choice, as it has given me a career path I have truly enjoyed.

Besides my studies, I worked quite a lot. From my first summer, I worked at Elisa in a non-finance-related job. I ended up staying for almost two years, which wasn’t my initial plan, but the working culture and the internet boom were captivating to witness. After Elisa, I moved to American Express, where I worked until I graduated in 2004. My exchange at Michigan State University sparked an interest in steering my career internationally, and I felt American Express could provide that. Gradually, I began doing more work related to my field, primarily in corporate risk and credit rating assessment. I also noticed American Express had a global Finance trainee program for recent graduates, where I started to push myself. Early on, my career seemed to be heading in a specific direction. Breaking into investment banking or consulting didn’t seem like an option at that stage of my studies. However, my career path took an unexpected turn when Professor Puttonen, a board member at Carnegie and my master’s thesis supervisor, called me in the summer of 2004 and asked me to apply for an analyst position at Carnegie. I saw it as an excellent opportunity and couldn’t turn it down, even though I was ready to start at American Express after the summer.

So, you ended up starting your career in investment banking. How were your first years at Carnegie and how did your role change over the years?

As is commonly said, the first years in investment banking are marked by fast learning. I had to develop a new skill set and learn what it meant to be an investment banker, as I didn’t have any prior investment banking traineeships. My tasks varied from gathering information for senior bankers to doing valuations and creating presentations, but I was also given opportunities to participate in client meetings from early on. I got to work with people like Jukka Mäkelä, Mikko Harju, and Jussi Majamaa, who brought high working standards from London to Carnegie. If my work wasn’t up to par, it was revised until it met the required level, which often meant long days, but also steepened my learning curve. Over time, you start to do the job at a high level automatically and become more efficient. The job offered fascinating projects and the opportunity to work with great people, which I found really exciting.

My first years were particularly engaging, as this was just before the financial crisis when the M&A market was booming. Carnegie was involved in a wide range of large transactions, so I participated in IPOs, public tender offers, and other M&A transactions across the Nordics.

As I progressed from analyst to associate director, my role evolved from gathering information to more people management. For instance, I began leading analysts and taking more responsibility for due diligence coordination and managing other advisors. Client relationship management was usually handled by the most senior bankers, so it took time for me to transition into that area.

In investment banking, you often work either on the buy-side or sell-side. What do you think are the main differences between these two? Additionally, what were the main learnings overall from IB?

On the sell-side, you represent one candidate but negotiate and discuss with multiple potential buyers to find the most suitable candidates. The goal is to narrow down the candidates to those most motivated to do the transaction, thereby maximizing the deal value. On the buy-side, the nature of your work depends on whether you’re dealing with a strategic or a financial buyer. For instance, an industry player has longer processes and possibly more knowledge about the target and its industry, whereas a PE firm operates extremely fast and may require a large amount of information quickly.

One key lesson from investment banking was the importance of doing excellent work from the outset. Even though, in the beginning, the work usually came back for revisions, it was developmental. Moreover, it helps you move forward in the hierarchy because you develop a reputation as a reliable worker who gets the job done.

I also learned that investment banking truly is a social business, where you jump in the deep end right at the beginning, at least at Carnegie. For instance, I got to meet and present to the board of a major, publicly listed company in my second week. The longer the process goes on, the more trust and how you get along with different people is emphasized. It was interesting to see the problems weren’t always solved based on finance theory, but with personal chemistry and social skills. This last-mentioned point genuinely helped me in the future of my career.

This brings us to the next phase of your career. What laid behind the decision of your transition to Kone? 

After the 2008 financial crisis, the Finnish M&A advisory industry changed. Boutiques started to gain more share of the transaction market since they were more local and had a better cost structure compared to Nordic-level big investment banks. At the same time, the IPO and equity markets stagnated, leading to fewer transactions for the big players. This meant more pitching and the same hours but fewer transactions and smaller bonuses, which wasn’t a great combination. Additionally, I still sought international experience and a higher volume of transactions, which the IB couldn’t offer. Carnegie focused on large deals, which were limited in number. I wanted something new and a more hands-on experience in transaction execution.

Carnegie decided to close the Helsinki corporate finance office, and I probably would have had the chance to move to Stockholm, but I had already started to consider a transition outside investment banking. So, I ended up at Kone as an M&A manager. 

How was your experience in Kone and what were the differences compared to IB world’s transaction work? 

When I started at Kone, I was amazed by the volume of transactions. Over six years, I was involved in over 120 transactions in more than 25 countries, with the busiest year seeing 38 transactions. Although my office was in Keilaniemi, most transactions were in Southern Europe, the USA, and all around the world.

The nature of the deal-making differed quite a lot. For example, when acquiring a small elevator maintenance firm, the owner might be doing their first and last transaction, making the process highly sensitive and emotionally charged. Simultaneously, the power balance between the target and acquirer was very skewed, as Kone is a 20+ billion-euro company, while the targets were often valued at a few million to a few tens of millions of euros. Leading such a transaction, where the opposite party may not have any knowledge of transactions, was fascinating. This emphasized the ability to read situations and build trust, as you needed to convince the target to sell and guide them through the transaction process. Additionally, the slower pace of the deals introduced new dimensions to deal-making. It was crucial to maintain the target's engagement throughout and prevent them from getting cold feet or overthinking the process, as it could be prolonged for reasons beyond your control.

These aspects were something new and motivating. Investment banking transactions had a typical structure, whereas industrial M&A truly offered something interesting since there were more moving parts. When you end up trying to do a transaction in the outskirts of Nairobi with an entrepreneur, you certainly get to the core of deal-making.

Was it something that has helped you in your career later and does that relate somehow to what PEs does? 

Yes, I would say so. Good companies usually don’t struggle to find buyers, sponsors, or co-owners. However, at the end of the day, these people typically won’t make the final decisions based solely on economic criteria. The decision is also based on questions such as whether you can rely on the buyer, if the personal chemistry works, and what else you can offer besides cash. I wouldn’t say I have been the most knowledgeable in finance theory or best at math, but I have developed a skill set which helps me get along with people. Working on many transactions at Kone helped me understand my opposite party and find the critical issues for them, which helps build trust. Seeing so many different cultures and situations was a great experience and helped me in my career.

After Kone, you ended up on Onvest for a little while. How did that happen and what were the reasons behind the move? 

Although Kone was a brilliant platform to develop, the transactions eventually became less motivating due to their repetitive nature. There was little variation, especially with financial parameters and types of companies, since they were mostly small maintenance companies in different countries. Kone has a clear promotion system where they promote people from support functions to their business segments, which gave me a couple of choices for my career. This meant I had to choose between the finance world and jumping into the industry to start leading a business unit. I knew I wanted to continue in the M&A world, and I had done investment banking and corporate M&A but not PE. Then I got an offer from Onvest, which was an intriguing opportunity to build something new on top of a long history.

Onvest was at a turning-point because the old Onvest had been demerged into two new companies, Onvest and Conficap. Onvest was in need of someone to develop and lead their new strategy for capital allocation and investments. At the time, Onvest’ s operations consisted of real estate and industrial ownership investments. Our mandate involved investing in both listed and unlisted companies. This prompted us to initiate a thorough strategy process and explore potential investment targets.

One of the investments was Harvia, when after the IPO we bought Capman’s existing 12.5% stake in a share block buy. The rationale behind this move was to become a significant investor in an excellent, family based, and growing Finnish company to prevent situation where it is sold to some international buyer right away. Harvia was a reliant performer on which the investment was based on, but the fast growth was a nice addition. 

Let's delve into your journey to Evli after spending a couple of years at Onvest. You initially transitioned to EAB before eventually joining Evli. Could you share your thoughts about the transition and your current role at Evli? 

After a few years at Onvest, my and the owner’ vision of how to develop Onvest didn’t align, so I began to consider other options. I ended up discussing with EAB, having previously crossed paths with couple of people there. They presented an intriguing vision of integrating sustainability and ESG goals into alternative investment funds. While they had successfully implemented this approach in real estate and infrastructure investments, it was yet to be applied in private equity. This was quite a difficult task to do, since in order to establish a PE fund you have to have three things: exceptional team, track record, and good pipeline for possible future investments. Naturally, you lack a track record when you start the track record, but we found our way. 

We decide to have a bit different approach compared to a typical fund and identify investments first and then raise funds for them. This ensured transparency in the investment process for our investors. The strategy worked well for a specific group of investors who didn’t need diversification by the fund and wanted to know where their money went. 

The private equity market is typically split into three categories: early-stage venture capital, later-stage minority investment in growth companies and buyout. From these, we decided to focus on the growth equity investments. Subsequently, we began acquiring 20%-40% stakes in companies, primarily through share issuances, enabling direct injection of funds into their balance sheets. To date, we have invested in Proventia, Solnet Green Energy, Bladefence, and Elcoline, averaging one investment every six months.

Evli came into my picture when the company bought EAB Group in 2022. While the acquisition didn't fundamentally alter our operations, it gave access to more resources due to Evli's larger scale. In addition, the fundraising is to some extent easier, since Evli has larger number of clients and investors. Our product especially attracts wealthy individuals who search for a vehicle to invest in non-listed companies without being active owners themselves. 

Evli EAB Private Equity uses a co-investing strategy which operates and is regulated differently compared to alternative investment funds, since the investment is known right away. Could you elaborate a little on what is co-investing, and do you think something will change in the future considering the created investment vehicle?

Our co-investment strategy is built around the idea that Evli and the investment team invests their own money and puts their skin in the game. Then the pool of investors makes their financial commitments alongside Evli, so we have been kind of the anchor investor and others have participated in the investment. However, in some larger investments, for example Solnet 15 million euros and Elcoline almost 25 million euros, we have relied on larger co-investors such as Tesi and Elo. 

Now that we have successfully invested in these four companies and built a track record, we could ponder if we would want to have the typical PE fund structure. This would mean a larger fund size, but also give us the ability to attract investors who won’t like to invest in a such focused investment strategy. Of course, our investing process would be more efficient as we would have the ability to make capital calls to finance the investments. 

Then the last but not least the final question. What advice would you give to 25-year-old self? 

Go and try different things in the early stages of your career, because it will be harder later. The wider range of experiences you have, the more it will benefit you in the later stages of your career. Of course, you can pursue the career of an investment banker and do it for your whole life if you want it, but if I would advise myself this would the one advise. Remember that the job you do won’t even have to be directly affiliated with finance because, for instance in private equity, you will benefit from different industry knowledge. Dare to try different and new things.


Juha Kivistö is the previous Editor-in-Chief of AFA Quarterly.