CFO Insights into Q3 2025

Olli Sinnemaa Chief Financial Officer (CFO) olli.sinnemaa@finnfund.fi

In Q3, Finnfund successfully completed the first close of the Digital Access Impact Fund, the first fully Finnfund-managed fund. The initial close raised EUR 80 million.

New investment decisions accelerated during the quarter. To date in 2025, we have made 15 new investment decisions totalling EUR 124 million.

Finnfund’s portfolio now stands at EUR 731 million, down EUR 47 million (-6%) from year-end 2024. This decline is primarily due to a high volume of early loan prepayments and the weakening of the US dollar against the euro. The USD/EUR exchange rate impact for 2025 is approximately -12%.

Revenue continued to face headwinds from the same factors driving portfolio contraction: lower interest rates and a weaker USD. As most investments are USD-denominated while reporting is in euros, currency movements significantly reduced euro-denominated income. Interest income fell 26% year-over-year in Q3 (EUR 20.4 million vs. EUR 27.6 million). Interest expenses rose 10% due to new bond issuances. Net interest income declined 34% (EUR 10.1 million vs. EUR 15.4 million).

Total net financial income after Q3/2025 was EUR 10.3 million (vs. EUR 15.4 million in Q3/2024).

Operating expenses—including administration, depreciation, and other costs—remained stable and well below budget.

The result before sales and write-downs was a loss of EUR 3.6 million (vs. EUR 2.1 million profit in Q3/2024). In great contrast to last year, no sales gains were recorded. The quarter ended with a net loss of EUR 22.7 million (vs. EUR 6.9 million profit in Q3/2024).

2025 has been financially challenging due to global market volatility and instability in our mandate countries. Some exits under preparation are projected to generate sales gains, but as of this writing it is not clear whether they will take place in 2025 or later. Other than that, we expect performance to improve in 2026 as our strategy to prioritize cash-generating investments begins to deliver results.