Finland - Finnish city, Espoo, is scouting for investment teams to manage a new €364m fund being created.

The municipality will capitalise the fund, designed to support the city’s long-term infrastructure and real estate investment, from the sale of its remaining stake in energy firm E.ON Finland Oyj to Fortum. The Finnish competition authority will rule on the divestment by the beginning of June.

Shortlisting of likely contenders for between four—six equal mandates will begin at the end of May. Espoo development manager Risto Saarni said the council would recruit on the basis of long-term corporate viability, investment philosophy and proof of profitable activity.

The newly created fund will operate on a principal-protected basis, with the bulk invested in equities and fixed income. Alternative assets will account for up to 15%, with up to 7% in fund of hedge funds and up to 2% in real estate. Although the city council has fixed overall asset class allocations, Saarni said there was some flexibility about precise allocations within those categories.

The fund will screen stocks in its 15% allocation to global equities according to ethical criteria. “We favour the idea but ethical investment is somewhat difficult to determine,” Saarni said.

Espoo’s new fund mirrors an earlier fund set up in 2001 after the city sold 50% of its stake in E.On.

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