Invalda INVL’s equity increased to EUR 130.8 million at the end of 2022

Invalda INVL’s equity at the end of 2022 was EUR 130.8 million, or EUR 11.07 per share. The figures were 14.24% and 13.53% larger, respectively, than a year earlier (also taking into account the EUR 7.7 million of dividends paid to shareholders).

Thanks to an increase in the value of investments in the fourth quarter, Invalda INVL was profitable last year, earning a net profit of EUR 16.67 million. In 2021, the company had a net profit of EUR 37.45 million.

Although last year was extremely volatile, clients increased investments in the products the INVL group manages. The group’s client assets under management totalled EUR 1.9 billion as of 31 December 2022, which is 18.3% more than a year earlier (EUR 1.6 billion), while the value of investments decreased by EUR 92.3 million in the year. The number of clients entrusting their assets to the Invalda INVL group increased by 16.6% to 303,900.

“In 2022, the evolving geopolitical and economic environment in the world had an important impact on business and investment decisions. The war in Europe, volatility of markets and energy prices, and rapid rise of interest rates all posed challenges but also opened up new opportunities. The general decline in most markets led to losses for a large proportion of investors last year. What is important, however, is that over the longer term, even taking negative periods into account, investments have earned, and are earning, adequate returns. Given the prevailing conditions in the markets, we view 2022 as a reasonably good year. Work we carried out or started last year will undoubtedly have a significant impact on the value and performance of our business in the future,” says Darius Šulnis, the President of Invalda INVL.

The investment management and life insurance business

Invalda INVL’s revenue from the operational part of its investment management business, i.e. the management of clients’ assets, was EUR 15.8 million last year and decreased 4.1% compared to 2021.

The investment management and life insurance business, including investments in collective investment undertakings managed by INVL, had a pre-tax profit in 2022 of EUR 13.5 million. That compares to a pre-tax profit of EUR 13.8 million in 2021.

Invalda INVL had significant transactions in the asset management area in 2022. The acquisition of Mandatum Life’s life insurance business in the Baltics was completed at the start of July, and late in the year an agreement was signed on merging part of the retail businesses of Invalda INVL and Šiaulių Bankas.

“These are fundamental steps in the development of a retail business geared towards a more mature society that seeks stable financial grounding and investment income. The next-generation bank that is being created, with Invalda INVL as one of its major shareholders, will provide even more services from one source and offer market-driven solutions that deliver more value to clients, employees and investors,” Darius Šulnis says.

The private equity, alternative and real asset funds managed by the INVL group successfully created value for investors as they continued to make acquisitions and raise funds. The INVL Baltic Sea Growth Fund, the leading private equity fund in the Baltics, added two companies in Lithuania and one in Latvia to its portfolio, and through portfolio companies invested in the Czech Republic and Poland. The successful operations of the majority of the companies the fund manages resulted in good performance and growth in value by the fund. The INVL Baltic Sea Growth Fund’s portfolio companies, with roughly 8,000 employees, had unaudited consolidated revenue of over EUR 500 million last year and EBITDA of EUR 55 million. The fund continues to actively seek opportunities to invest in businesses in the Baltic countries, Poland and other nearby markets.

The second sustainable forest and farmland fund, the INVL Sustainable Timberland and Farmland Fund II, has already raised more than EUR 81 million of investor funds and increased land holdings in Latvia. The INVL Renewable Energy Fund I, which is currently investing in renewable energy projects in Poland and Romania and has raised EUR 52.9 million from investors, expanded its portfolio of solar park projects to 475 megawatts. The group also continued investment activities and developed existing investments in the areas of real estate, private debt, and information technologies.

We have focused on feeder funds. The INVL Partner Global Infrastructure Fund I, which invests in the infrastructure fund of a long-standing world-class asset manager, was launched in late 2021, and the INVL Partner Private Equity Fund I, which invests in EQT X, a fund with a target size of EUR 20 billion established by EQT, one of the world’s leading private equity investment firms, was launched in early 2023. The funds are successful putting investors’ money to work outside their home region and offering more opportunities to diversify investment risk. The INVL group intends to offer clients even more solutions for investing in leading global products.

For the INVL Family Office, 2022 was a year of growth. A range of new investment products and services have meant growing income for its clients and have attracted new clients.

Equity investments

Invalda INVL’s other equity investments, aside from the investment management and life insurance business, generated a pre-tax profit of EUR 3.8 million. The value of Invalda INVL’s investments was positively (EUR 3.9 million) affected by the profitable operations of Litagra, one of Lithuania’s largest agribusiness groups.

“Litagra delivered excellent results following several acquisitions, partly driven by global growth of food prices. Expansion in the poultry, feed and dairy sectors is significantly increasing the company’s potential. We expect reconfiguration of acquired assets and other actions focused on growth and economies of scale to boost sales in the near term and have a positive impact on competitiveness and long-term earnings in these areas,” Invalda INVL’s president notes.

The value of Invalda INVL’s investments was negatively affected by a decrease (of EUR 1.8 million) in the value of investments in banks, reflecting a general drop in the value of publicly listed banks.

“Both for Šiaulių Bankas and for Moldova’s largest bank Moldova-Agroindbank, 2022 was a record year. While both banks performed well, that was not reflected in share price growth due to the unusual situation in the markets. We believe that such strong, well performing banks that generate high returns and are growing rapidly will gain the market’s appreciation,” Darius Šulnis says.

Shareholders’ meeting

The shareholders of Invalda INVL will vote on approving the company’s 2022 financial statements at a shareholders’ meeting to be held on 30 April. The meeting will also consider a proposal on the purchase of own shares and related terms and conditions. A previously formed reserve of EUR 9.89 million would be used for buying the shares.

Shareholders are also asked to vote at the meeting on the exercise in 2023 of stock options granted to employees of Invalda INVL and its group companies in 2020. For that purpose, new shares would be issued and the share capital of Invalda INVL would be increased by their nominal value.

Additionally, shareholders will decide on 30 April about entering into option agreements with employees of Invalda INVL and its companies and the procedure and price for acquiring the company’s shares in 2026.

About Invalda INVL

Invalda INVL is a leading Baltic investment management and life insurance group. Growing and developing with an open approach, it creates well-being for people through its work. The group’s companies operate across Lithuania, Latvia and Estonia and serve over 300,000 private and institutional clients from the Baltic region and abroad. Those clients have entrusted the Invalda INVL group with the management of more than EUR 1.9 billion of assets in a variety of asset classes including pension funds, mutual funds and life insurance commitments as well as individual portfolios, private equity and other alternative investment activities. 

The shares of Invalda INVL have been traded on the Nasdaq Vilnius stock exchange since 1995. Invalda INVL’s equity at the end of 2022 was EUR 130.8 million.