Unified Nordic capital market could open new opportunities for Finnish companies – and the time to prepare is now
Last week, Finnish business newspaper Kauppalehti reported on Nordic Compass, an initiative aimed at creating a more integrated Nordic capital market. While the initiative is still far from becoming a reality, corporate executives and boards should already be looking ahead: what would happen if Finnish companies found themselves competing for investors’ attention in an increasingly Nordic investment landscape?
The Nordic Compass initiative is particularly interesting from the perspective of Finnish companies. Its ambition is to create an integrated Nordic public capital market by reducing barriers to cross-border securities trading and harmonising listing requirements across the region.
The scale of the opportunity is also noteworthy. According to Nordic Compass, the combined gross domestic product of the Nordic countries is 1,800 billion euros, and the capital market is worth 2,600 billion euros. Together, they would represent an economy comparable in size to those of G20 countries.
The initiative also addresses a genuine challenge. Across the Nordic region, there is growing concern that high-growth companies are increasingly seeking capital and stock market listings elsewhere, particularly in the United States, where access to funding can be greater. The thinking behind Nordic Compass is that a larger, more integrated market could attract more international capital to the region.
For Finnish companies, this is an encouraging prospect. However, there is another side to the equation. As the investment landscape expands, so does competition for investors’ attention. Finnish companies could find themselves competing more directly with Swedish, Norwegian and Danish peers for visibility and capital.
This raises a timely question for executives and boards: why should investors choose to invest in our company
Broader investor landscape requires companies to reassess their position
Investor interest develops in stages. First, investors need to become aware of a company. They then need to understand its strategy and business model before they can begin to consider it as a potential investment.
A compelling equity story supports each stage of this process. It should clearly explain where the company intends to compete and succeed, what will drive its growth, how that growth can be achieved profitably, and how successful strategy execution will translate into financial performance over time.
A well-defined equity story becomes particularly important when a company seeks to reach new investor groups beyond Finland. For an international or Nordic investor, a Finnish company’s position in its domestic market may mean relatively little without further context. Companies must therefore be able to position themselves within an investment landscape that investors recognise and understand. Which market is relevant? Who are the company’s true peers? What differentiates it from those peers? And why should investors have confidence in its ability to create long-term value?
This is why Finnish companies should already be assessing their investor readiness from a broader perspective. What does their current shareholder base look like? Which new investor groups across the Nordic region could they realistically attract? And which companies would investors use as benchmarks?
At the same time, companies should take a critical look at their equity story. Which elements stand up to international comparison? What evidence already supports their investment case, and where are the gaps?
Developing an equity story is therefore much more than a communications exercise. It is also about understanding the company’s position in a changing investment landscape and making deliberate choices about which investors to target and what will make the company attractive to them.
Is your company ready for a broader investor landscape? Five questions to consider
Although the final structure and timetable of the Nordic Compass initiative remain uncertain, Finnish executives and boards would benefit from taking a broader view of their company’s position in the capital markets today.
- Are we known beyond Finland? If the relevant investor landscape expanded across the Nordic region, how many potential investors would already have our company on their radar?
- Does our equity story stand up to Nordic comparison? Is our logic for growth, competitive advantage and value creation clear to investors who may be unfamiliar with our company or its domestic market?
- Who are our true peers? When investors assess our company in a Nordic rather than purely Finnish context, the competitive landscape for attention and capital may look very different.
- Are we building investor relationships before we need them? Identifying and systematically engaging potential new investor groups should begin well before any significant market changes take place.
- If the market is moving in this direction, what should we be doing differently today?
The companies best positioned to benefit from a more integrated Nordic capital market will be those that have done their homework before the opportunity arises. They will have assessed their competitive position in a Nordic context, identified the investors they want to reach, sharpened their equity story and invested consistently in building visibility and trust. The time to start preparing is now.
IR Partners is a partner of choice in capital markets communications and strategic communications. We are a trusted partner to the management teams of listed and privately held companies, supporting them through complex situations and strategic turning points. If you are considering your company’s growth strategy, equity story or position in the capital markets, please get in touch. We would be pleased to continue the conversation.
Tiina Olkkonen
Chair of the Board, Senior Advisor, Founding Partner
