INVESTMENT STRATEGY

Norvestia’s twofold investment strategy consists of an actively managed portfolio and industrial investments. The emphasis between different investment strategies will be assessed on a case by case basis.

Investments in the actively managed portfolio are made according to prevailing market circumstances. The aim is to achieve a good risk-adjusted return. At year-end a large part of Norvestia’s assets were invested directly in shares on the Helsinki stock exchange. Investments may also be made in other stock exchanges in order to diversify risks and on the basis of return expectations, with the main emphasis on the euro zone.

Norvestia will make share investments in the actively managed portfolio focusing mainly on value shares, i.e. shares that are offered at prices that are low, both historically and in relation to a company’s net asset value and performance expectations. Investment levels between shares, funds and interest-yielding investments will be assessed as circumstances dictate.

The aim of industrial investments is to achieve above average market returns by developing the target companies. According to the current investment strategy, about 20-30% of investment assets may be used for industrial investments. These investments have no time limits and will be made when the right opportunity presents itself.

The Annual General Meeting in the spring of 2011 authorized the Board of Directors to purchase the company’s own shares and to decide on a possible share issue. Both authorizations are meant to be used for industrial investments. The use of leverage can also be considered when it comes to financing industrial investments.

RISKS IN INVESTMENT ACTIVITIES

In addition to pursuing steady asset growth, the guiding principle of Norvestia's investment activity is to diversify investments and thereby reduce overall risk.

The investment portfolio has been widely diversified in shares of various companies and partly across several geographical areas. The distribution of investments across various industries depends on industry-specific factors and their development. A significant proportion of investments may occasionally be focused on certain types of investments and securities, the negative development of which may substantially decrease Norvestia’s result.

As in all business operations, there is a risk involved also in Norvestia’s investment activities. Norvestia's performance is greatly affected by economic development and changes in share prices both in Finland and abroad. In addition, changes in exchange rates, particulary between the Swedish krona and the euro, impact the company’s result, since the majority of Norvestia’s hedge fund investments are krona-denominated. So any strengthening of the krona against the euro would improve returns from Norvestia’s Swedish funds. In turn, however, changes in other exchange rates may affect the funds’ krona-denominated results.

Norvestia's five largest investments as of March 31, 2012 consisted of the Futuris, Nektar and Zenit funds, the Pohjola bond and Nokia shares.