Aalto University

Endowment and investment strategy

The endowment supports the sustainable funding of Aalto University’s operations, research, education and innovation.
An autumnal aerial view of Aalto University campus from Laajalahti, autumn colours, yellow and orange, are prominent in the trees
Photo: Matti Ahlgren / Aalto University

In a nutshell

The long-term capital of Aalto University Endowment is invested in the financial markets with the purpose of generating funding for its academic activities. The endowment was set up by a fundraising campaign and government capitalization between 2008 and 2012, which generated a total of EUR 700 million. EUR 50 million in investments from special purpose funds of the three merged universities is also a part of the endowment.

Endowment portfolio comprises of capital from Aalto University general endowment fund as well as capitalizing and hybrid funds. Ownership of subsidiary companies as well as real estate, real estate investments, apartments and other operative assets are excluded from the endowment portfolio.

Rehtori Ilkka Niemelä katse kameraan suunnattuna, kuvattuna Dipolissa

The endowment has enabled long-term investments towards increasing demand in research and education for future years.

Ilkka Niemelä, President of Aalto University

Supporting the university

The main purpose of the endowment is to generate annual funding for Aalto University's operations to enable the university to fulfil its strategic goals as well as support high-quality education, research and innovation. The endowment provides the university with financial independence and enhances funding stability, both of which are deemed fundamental requirements for a top-class university.

Read our 2020 review for donors to learn more

Spending policy

Endowment Spending Policy sets principles for defining the level of spending from the endowment towards the university operations. The predefined spending policy provides a clear and transparent way to determine future endowment spending, that will support the annual operative planning of the University and donor communications, and sets a clear target for the endowment strategy, including a strategic risk/return profile of the endowment portfolio. 

The general endowment fund and capitalizing funds have a target spending rate of 2.5% per year, which is based on an expected long-term real return, in other words, a return above the inflation rate. This ensures that these funds will grow in line with inflation and can therefore support academic activities consistently and sustainably. Hybrid funds spend their fixed nominal return of 5% as well as the capital itself during the pre-determined duration of the funds. 

The actual annual spending is decided by the Aalto University Board each year and stability acts as the key factor in that decision-making. Changes in the portfolio market value and the overall funding of the university are also considered. 

Key figures of 2023 and annual reports

On this page we present key figures of 2023 and the Annual Board Report and Financial Statements.

Read more
A woman working with material in the lab

Long-term investment strategy

The cornerstone of our investment strategy is our purpose – providing funding for the university while accumulating the real value of the endowment. Reaching these goals requires prudent and consistent risk taking over time. Concurrently, we maintain adequate liquidity in the portfolio to ensure our ability to cover the medium-term funding needs regardless of the market environment. Investments in private assets and the implementation of more advanced investment strategies will also be done when they offer attractive expected returns.     

Graph of Aalto's endowment portfolio structure
People jogging on a path between birch trees
Photo: Aalto University / Anni Kääriä

Responsibility and sustainability

The purpose of Aalto University is to shape a sustainable future through research, education and positive societal impact. The endowment contributes to this purpose directly by enabling these academic activities via its annual funding and building financial resilience. We are committed to responsible investing and managing the endowment in a sustainable way in line with our values. Aalto University is a signatory to the Principles for Responsible Investment (PRI) and a member of FINSIF and Standards Board for Alternative Investments (SBAI). 

Read more on Aalto University's strategy and how we shape a sustainable future

Endowment actions to support strategy

Approaches to responsible investing

As we invest through investment funds, a key part of the investment process is selecting and monitoring these external fund managers. Our external managers are encouraged to use multiple approaches to responsible investing. For example, exclusions are a useful tool for some investment strategies, whereas integrated ESG (Environmental, Social, and Governance) analysis and active ownership can bring better results and impact on others. Our focus is always forward-looking, which means that the expected impact of investment decisions is evaluated.  

Responsible investing must be balanced between both risks and opportunities. In short, we control our exposure to investments with a high ESG risk and negative impact, while aiming to increase our exposure to investments with a positive ESG profile and impact.

ESG performance categories in investment strategy

Our long-term target is to have a carbon neutral portfolio. As a medium-term target, we will significantly reduce the carbon intensity of our portfolio. This is to be implemented gradually from 2021 to 2030 and we will begin reporting on carbon intensity and other responsible investing indicators in 2021. 

Our long-term target is to have a carbon neutral portfolio. As a medium-term target, we will significantly reduce the carbon intensity of our portfolio. This is to be implemented gradually until 2030. Thereafter, we target a declining trend of carbon emissions in line with global climate benchmarks. A more detailed description of our sustainability profile and roadmap to 2030 and beyond can be found in the latest release of our sustainability report and the latest endowment strategy publication.

Management and oversight

Contact us

Marianna Bom

Chief Financial Officer

Iivo Paukkeri

Head of Investments

Lauri Ehanti

Senior Portfolio Manager

Lauri Ström

Portfolio Manager

Filip Hintze

Junior Investment Manager

Endowment news

Three students sitting at the School of Business. Photo: Ari Toivonen
University Published:
Students in front of BIZ
University Published:

Aalto University endowment returned 3.2% during first half of 2023

Endowment provides EUR 34 million to fund research and education this year
Students studying together in a group
University Published:

Aalto University endowment provided EUR 35 million in 2022 to education and research

Endowment investment return was -3.5% in a challenging investment environment
Kaksi henkilöä istuu nojatuoleissa Dipolissa.
University Published:

Aalto University endowment returned –5.1% during first half of 2022

Endowment provides EUR 29 million to fund research and education this year
  • Published:
  • Updated: