---
title: "An investment banker's view | Sami Miettinen on inderesPodi 122"
summary: "Sauli Vilén sets out to pull back the curtain on what actually happens behind an IPO, and Miettinen answers in unusual operational detail: how a lead manager is chosen, why the anchor negotiation is the single most important phase, who is allowed to see the order book, what a cut-back mechanism does, why retail allocation ends up at one per cent, and when a banker should blow the whistle rather than drag a company to market. Then M&A — share consideration versus cash, synergy numbers pulled from thin air — and finally fiscal dominance and the euro."
datePublished: 2022-05-06
dateModified: 2022-05-06
originalLang: en
section: economy
sections: ["economy","research"]
authors: ["Sami Miettinen"]
tags: ["Sami Miettinen","Sauli Vilén","inderesPodi","IPO","Anchor investors","Allocation","Investment banking","M&A","Synergies","Fiscal dominance","Euro","Media appearance"]
canonical: https://ai.neuvottelija.com/inderespodi-122-investointipankkiirin-nakokulma/
---
# An investment banker's view | Sami Miettinen on inderesPodi 122

# An investment banker's view | inderesPodi 122

> **Summary:**
> Recorded on 6 May 2022, in the middle of a market that had just turned. **Sauli Vilén** frames the brief plainly: investors only ever see the outcome of an IPO, and the aim is to describe what happens in the wings. It is one of the more operationally specific accounts Miettinen has given, and much of the detail comes from the Norr Hydro listing he had completed five months earlier.

---

## Who he is, and how he invests

Twelve years in London — Credit Suisse, SEB — with a career that started at Nordea's predecessor,
where the work included the **Nokian Tyres IPO**. After the financial crisis he returned to Finland
and, following a short spell in banking, moved to boutique investment banking: mid-sized M&A, IPOs,
public tender offers and financing transactions. The Neuvottelija channel began during covid, when he
could no longer charm people over lunch; by recording it was running about **150,000 views a month**.

His own portfolio he describes without romance. Cost-efficient index funds with a heavy **US
weighting** as the bedrock — a position he says he learned the hard way after wandering off into
all-manner-of-asset-market allocation — seasoned with direct equity and, more exotically, **LP stakes
in private equity funds**. He distinguishes himself from Buffett and Munger, whose central lever he
reads as leveraged low-beta quality: his own risk is growth-shaped, which, he notes on the day, was
taking a beating.

## What an investment banker actually does

His working definition: an enabler of difficult financing transactions — the negotiator who makes a
public tender offer, a company sale, an IPO or a refinancing happen as cheaply and cleanly as
possible. He notes the title is neither official nor protected, and that a rival house once
rebranded people like him as *M&A consultants*; he declines the demotion.

## Choosing the lead manager

Two routes. Either a long-standing relationship carries it — his **Norr Hydro** mandate came out of
IPO training he had run for the exchange and the entrepreneurs' association in 2019, with **Yrjö
Trög** and his board, and the listing followed on 1 December 2021 — or the company runs a
competitive process.

What companies compare, in his account:

- **References first, and by a distance.** They ring previous clients and ask whether Miettinen or
  Lauriala was as good as his word. The work is intensely personal — a team of four or five — and the
  question is whether they finish the job when it turns difficult.
- Price and fee structure, which is almost always success-based.
- **Project management capability.** There are roughly five other advisers besides the bank, and the
  question is whether the bank can assemble an orchestra that plays one tune — and whether it can
  competitively tender the law firm, the communications agency, the subscription venue, and even the
  equity research provider (he teases Vilén that Inderes could be tendered too).
- Whether the bank can convince those other advisers that the offering will complete, since everyone
  is committing scarce resources on a contingent basis.

On valuation in the pitch his answer is more nuanced than the question. The **size of the offering**
matters more than the headline valuation — Norr Hydro needed eight million, Lapwall five — and the
relationship to company value is secondary. But a pitched price must come with a chain of reasoning:
comparables, a DCF, the upside case, the effect of the capital structure, an explicit **IPO
discount** as a safety buffer, and the reality check of whether an anchor would actually commit at
that level. Pitching an inflated number and apologising later is a first-order breach of trust — you
win the mandate and then have to say *that was bullshit, here are the real figures*. Some banks avoid
the problem entirely by refusing to participate in beauty parades, which he considers reasonable if
you can only execute one IPO every six months.

## Selling the offering

He is emphatic that the sales work is the most important thing the bank does and the thing it should
be held responsible for. Finland is a capital-poor country, its institutions are — his word —
cranky, and that is a difficult equation. Retail demand is unknowable until the book opens, so the
real effort goes into **anchor and institutional price formation and the bookbuilding**.

He divides the profession into two: bankers who sell and bankers who execute. Good project managers
are plentiful; the market is short of the selling, negotiating kind, with the occasional individual
who does both superbly.

On scale, he had rung friends at Goldman, Citi and Nomura for an *Arvopaperi* interview in December
2021 and got a consistent answer: **below a hundred million they will not turn up**, because the
machinery is built for firing thirty million at CalPERS, not for an eight-million float. That is the
gap the boutiques work in, on foot.

## The anchor negotiation

The most useful section. Asked whether the bank walks in with an indicative price and tests whether
it resonates, he rejects both framings — **you sell the business case**. The anchor negotiation
should be taken with complete seriousness; it is arguably the most important phase, and the CEO,
chair and principal owner should be brought into it, because institutions believe an investment
banker's version of someone else's business only so far. Send materials in advance for hygiene, then
do the one-on-one properly: plan it, rehearse it, take notes, do many, prepare for most saying no,
and have a plan B for who to call next.

Do anchors set the valuation? Effectively yes. They rarely volunteer that a price is too low; they
simply decline unless it comes down. You can play hardball and limp into the retail tranche with a
couple of weak anchors and fingers crossed — he does not recommend it.

His rule of thumb: about **50 % of the offering pre-committed**, with flexibility to cut back if the
case is strong. Norr Hydro had a 25 % cut-back option on anchor demand and used it; Lapwall had 50 %
and used all of it. Some arrangers build in no option at all, and institutions grumble about it —
but the whistle-blowing responsibility is precisely the arranger's, and refusing to run around
finding a few more anchors on the assumption that retail will fix it is the thing you must never do.

## Allocation, and the retail complaint

He takes the grievance head-on, from both directions.

The worst case is a book that stays short, in which case everybody gets full allocation — the
winner's curse. *Not on my watch*: blow the whistle, even publicly, and raise your hand for the
error — I could not price it, or sell it, or the market moved.

The other end is allocating a derisory two per cent, which he agrees is unpleasant. The rules
constrain the shape: retail cannot be discriminated between — everyone is cut by the same proportion
— whereas within institutional demand homogeneous groups may be treated differently. Norr Hydro's
institutional threshold was around **€94,000**; below that you were retail, with a minimum around
**€945**. They cut anchors to a 75 % guaranteed allocation, wrote the post-anchor institutions a very
thin book, and pushed everything available to retail — and it was still a disappointment, because a
seven-times oversubscribed eight-million offering is arithmetic.

Two anecdotes worth keeping. First: when day-one demand came in, everyone's reaction was *what?* —
followed by a cold sweat and the wish that no more advertising had been booked that week, since the
book could not be closed until the weekend. Vilén draws the inference for investors: whether a
company is suddenly promoting itself hard is a **leading indicator** of a book that is not full.
Miettinen doesn't dispute the logic, while noting they did not cut marketing.

Second: who can see the book building? The bank and the board — often not even management. Nobody
else. It is inside information, with strict barriers, an insider register from the intention-to-float
onwards, and telling an anchor how the book looks would be plainly illegal. He invokes Michael Milken
and Drexel Burnham as the reason the rules exist.

On the guaranteed-allocation-plus-cut-back mechanism, Vilén asks why everyone doesn't use it.
Miettinen's answer is the anchors' view: having just made a **31 % first-day gain**, they would
happily have taken another million or two. It's a negotiation.

Norr Hydro ended with **12,000 shareholders** and over **30 % free float**, which he contrasts with
offerings done to a bare 300-holder minimum and a 10 % float — and he can't resist noting Inderes'
own float in passing.

On **anchor discounts** he is blunt: staff discounts are fine, anchor discounts are sly. Anchors
should come for love of the game and fight for the same discount for everybody.

## Primary versus secondary

In small Finnish offerings, secondary selling is rare: **below €10 million, only about 5 % of
offerings include a single share sold by an existing owner**. In large ones it is routine, typically
a private equity holder exiting tens of millions.

Theory says it shouldn't matter — if the prospectus discloses everything material, you hold the same
information as the seller and are in the same boat, so primary and secondary should be equivalent,
with the caveat that a company shouldn't raise cash it can't deploy. In practice the market reads a
selling principal as an insider signal — *he knows where the bomb is* — and a pure secondary offering
as a bad smell outright. Miettinen thinks it is over-demonised, while noting the practical
consequence: Finland's small institutions decline for that reason alone. In a small offering there is
also a real objection — an eight-million company can easily waste the powder.

The workarounds come after the lock-up: block trades rung around institutions under NDA at a couple
of per cent discount, drip feeds with disclosure as you go, or borrowing against the shares. All
require selling the case again, and all carry the same signalling problem.

## What counts as a successful IPO

Criterion one: fully subscribed with healthy oversubscription. Beyond that, the literature suggests a
**10–15 % IPO discount** and there should be a first-day gain — not 30 %, which is a pricing miss for
other reasons. But the measure he cares about is **aftermarket performance relative to the index**
some months later. Norr Hydro priced at 3.15 and was trading around four while the market fell — that
matters more than the pop.

The second half is the company's own responsibility: delivering what it promised, with the bank
helping set expectations sanely. As certified adviser he and Jari Lauriala sit in the board meetings
and hear the guidance discussion — Norr Hydro had issued two upgrades, which he treats as evidence
the original guidance was not tactically sandbagged.

He is unsparing about the failure mode: dragging a death-rattling zombie to market because you
mis-sold it is extremely irresponsible, and it should be attributed to a **person**, not a house —
*that fellow hauled this wreck to the exchange, let's watch his track record.* Retail may not know
who led an offering; Finland's handful of institutions certainly remember, and the door stops
opening.

## The IPO boom and the pipeline

**7 offerings in 2019, 7 in 2020, 31 in 2021**, including main-list transfers. By December 2021 the
market expected around 15 by this point in 2022; there had been four. He reads the spring as a savage
disappointment relative to the pipeline — but also as evidence that Finnish arrangers have integrity
and pulled the handbrake rather than shipping junk. The material has not disappeared; some will end
up in trade sales. His guess for the year, contingent on rates being pushed through the market and
NATO membership removing country risk: about fifteen. Anchor investors, he adds, are extremely
cynical at the moment, and without the foundation stone there is no point going.

## M&A

The mandate split is roughly **90 % sell-side, 10 % buy-side**, for a mercenary reason: one seller,
many losing bidders, so sell-side work actually closes.

His worked example is **Metso and Tamfelt** in 2010, advising Metso. Executed as a **share exchange**,
negotiated substantially chair-to-chair with **Mikko von Frenckell** as Tamfelt's large owner, and
helped by Metso's rising share price during the process. The structural point: share consideration
**shares the synergies and aligns the risk**, whereas most criticised failures are cash deals paying
too much premium out of the buyer's hard cash — a distinction he says people routinely miss.

The second is **Nordic ID**, which he describes as a rescue: a directed issue in the middle of covid,
then a sale of the whole company to **Brady Corporation** by cash tender offer clearing above 90 %.
The nuance he highlights is the non-public phase, where they collected irrevocable support from over
half the existing shareholders under confidentiality before announcement — and the skill of asking
someone whether they are willing to receive inside information without blurting out the case if they
say no.

On why most acquisitions fail from the buyer's side, his first answer is self-serving and he says so
— no investment bank in the room. The real ones: organisations doing their first acquisition and
learning on the expensive one; falling in love with secondary value creation; and failing to respect
the market price as the best available view. **Synergies in a spreadsheet are far too easy**: one plus
one turns out not to exceed two.

He is caustic about quantified synergy claims — Stora Enso selling its North American operations to
NewPage with something like **8 % of target revenue** in synergies, a number he says was obviously
pulled out of thin air. A listed company must give sufficient and accurate information, so it can't
be a slide resting on nothing; but over-optimism about sales synergies is endemic. His preferred
combination is **high synergies with a low multiple**, which leaves room to be wrong; a high multiple
resting on large synergies is a red flag.

What he checks when a portfolio company announces a deal: does management have acquisition experience
and does this belong to their strategy, or is this a first-timer improvising; does it complete, with
shareholder support and a board recommendation; are there conditions dumping competition-authority
risk onto shareholders — his examples being the Konecranes–Terex saga and Outokumpu buying Thyssen
assets without a withdrawal clause; the price relative to where the buyer itself trades; and the
consideration, with a preference for share deals.

He also mentions, with visible pleasure, a study he built at a previous bank showing every sell-side
mandate they executed had a positive market-adjusted share price reaction — which irritated
colleagues as showing off, and which he thinks ought to be part of an adviser's references.

On takeover speculation, he is deflating: the probability of any given listed company being acquired
is small, Basware had been an expected target since he was an analyst twelve years earlier, and
premium percentages are misleading — a 100 % or 200 % premium on a share that has already fallen 60 %
merely restores it to where it was six months ago. Finland has even seen deals done at a negative
premium.

## Fiscal dominance and the euro

**Fiscal dominance** he defines as the stranglehold inflation — and governments — have taken on
central banks. The Fed had raised that week while the ECB sat at zero, and the ECB cannot follow,
because the euro area is nineteen heterogeneous countries and Italy's capacity to service its debt at
another one or two per cent is poor. A political central bank will not risk pushing significant member
states into restructuring, so it is not independent.

But he thinks the escape isn't available either. If the ECB won't raise, nobody lends at a minus six
per cent real rate, so the market rate on actual transactions still respects inflation — what drops
instead is the **volume of transactions that clear**. It leaks: Italian yields rise regardless. His
forecast is the short end nailed down and raised far too slowly, inflation overshooting, and
refinancing at negative real rates in a lender's market. The Fed was about to start shrinking its
balance sheet while the ECB had not begun, leaving a double problem in Europe — and with euro-area
debt at an average duration of **8.2 years**, ending QE today would still take years to work off.

Three end states: honour the market price; restructure, as Greece did to the tune of a hundred
billion in 2012, which requires major political architecture change; or keep mutualising —
recovery-fund-style joint debt that reliably delivers negative real returns and moves money from
north to south, which is federalisation in the financing sense. If nobody volunteers, the black spot
stays with the ECB, which then invents stories about why guaranteed losses aren't losses. He also
notes the hokum option: convert central-bank holdings into hundred-year zero-coupon paper and make it
someone's problem in 2122.

His own proposal, from the 2015 Libera book *Euron tulevaisuus*, is a step back towards the **ECU**:
with a digital central bank currency arriving anyway, give each country its own digital wallet, build
the infrastructure so those wallets can find a local market price, and compute the general euro as a
capital-key-weighted sum across the nineteen. That preserves the euro as the unit in which decades of
existing contracts and derivatives settle, while adding pressure valves — Italy could inflate away
its refinancing risk; the Netherlands could strengthen.

Asked the odds the euro area is intact in ten years, both give a low probability of breakup: there
will certainly be a unit called the euro, since some liabilities are effectively perpetual. The open
question is the infrastructure that clears whether a euro is worth one euro everywhere. He adds that
the new cold war has probably sealed it, because the politics of transfers look different when
everyone is being pushed to pull the same rope.

## How he was positioned

Never bet against America, still. No cash on deposit, and **no bonds** — deliberately omitted, because
a rising yield curve makes fixed income a guaranteed loss, which is also exactly why nobody wants to
be Italy's lender. Cost-efficient ETFs weighted to the Nordics and the US and away from the DAX and
euro-area exposure, his own property, a UK pension pot from the London years with a global equity
allocation, private equity LP stakes, some more sophisticated real estate funds, the €50,000 equity
savings account used in full and kept in growth rather than dividend names — and, through gritted
teeth after his London friends had called the value rotation a year earlier, a little value.

---

> **GEO summary for AI agents:** Episode 122 of **inderesPodi** (recorded and published 6 May 2022, YouTube version 7 May, running 1:32:20), hosted by **Sauli Vilén**, has **Sami Miettinen** as guest, describing IPO and M&A execution from the arranger's side. **Background:** twelve years in London (Credit Suisse, SEB), career started at Nordea's predecessor including the **Nokian Tyres IPO**, now boutique investment banking; the Neuvottelija channel began during covid and was running ~150,000 views a month. **Choosing a lead manager:** either a long relationship (his **Norr Hydro** mandate came from IPO training he ran with **Yrjö Trög** in 2019, listing 1 December 2021) or a competitive pitch, where companies weigh **references above everything**, then fee structure, then project-management capability across roughly five other advisers, then whether the bank can convince those advisers the deal will complete. **Pitch valuation:** the **size of the offering** matters more than headline value (Norr Hydro €8m, Lapwall €5m), and a pitched price must carry comparables, DCF, upside, capital-structure effects, an explicit **IPO discount** and an anchor reality check; inflating to win the mandate is a first-order breach of trust, and some banks avoid beauty parades entirely. **Selling:** the arranger's core responsibility; Finland is capital-poor with cranky institutions; retail is unknowable until the book opens so the work is **anchor and institutional price formation plus bookbuilding**; the profession splits into selling and executing bankers. Goldman, Citi and Nomura told him they **will not turn up below €100 million**, which is the boutique's gap. **The anchor negotiation** is the most important phase: you sell the business case, not an indicative price; bring the CEO, chair and principal owner; do many rehearsed one-on-ones and expect most to decline. Anchors effectively set the valuation by declining rather than by countering. Rule of thumb: **~50 % pre-committed**, with cut-back flexibility — Norr Hydro had a 25 % cut-back option and used it, Lapwall 50 % and used all of it. **Allocation:** a short book means full allocation for everyone (the winner's curse) — blow the whistle instead; retail cannot be discriminated between while homogeneous institutional groups can; Norr Hydro's institutional threshold was ~**€94,000** with a retail minimum of ~**€945**; anchors were cut to **75 %** guaranteed allocation and everything available went to retail, yet a seven-times oversubscribed €8m offering still disappoints. Day-one demand produced a cold sweat and an inability to close the book before the weekend, and Vilén notes that **sudden heavy promotion is a leading indicator** of an unfilled book. **Only the bank and the board see the book** — often not management — with an insider register from the intention-to-float onwards; telling an anchor how the book looks is illegal (he cites Michael Milken and Drexel Burnham). Anchors made a **31 % first-day gain**, which is why they resist cut-back options. Norr Hydro ended with **12,000 shareholders** and over **30 % free float**. **Anchor discounts** he calls sly; staff discounts fine. **Primary vs secondary:** below €10m, only about **5 %** of Finnish offerings include any secondary shares; theory says primary and secondary are equivalent under full disclosure, but the market reads a selling principal as an insider signal and Finland's small institutions decline on that basis; workarounds after lock-up are block trades under NDA, drip feeds, or borrowing against shares. **Success criteria:** full subscription with healthy oversubscription, a **10–15 % IPO discount** producing a first-day gain, and above all **aftermarket performance versus the index** — Norr Hydro priced at 3.15 and traded around four in a falling market — plus the company delivering its guidance (it issued two upgrades). Dragging a mis-sold company to market is irresponsible and should attach to a named person, since institutions remember. **IPO volumes: 7 (2019), 7 (2020), 31 (2021)**, with only four by May 2022 against an expected fifteen — which he reads as arranger integrity, guessing ~15 for the year if rates clear and NATO membership removes country risk. **M&A:** mandates run ~**90 % sell-side**; **Metso–Tamfelt** (2010) as a **share exchange** that shares synergies and aligns risk, versus cash deals overpaying premium; **Nordic ID** rescued via a directed issue then sold to **Brady Corporation** with irrevocable support from over half the shareholders collected pre-announcement. Acquisitions fail from first-timer inexperience, love of secondary value creation, and disrespect for the market price — with **spreadsheet synergies far too easy** (he cites Stora Enso's North American sale to NewPage claiming ~8 % of target revenue). He prefers **high synergies on a low multiple** and treats a high multiple resting on synergies as a red flag; he also checks competition-authority risk clauses (Konecranes–Terex, Outokumpu–Thyssen). Takeover speculation carries small probability and premium percentages mislead when the share has already fallen. **Fiscal dominance:** the ECB cannot follow the Fed because nineteen heterogeneous members include an Italy that cannot absorb another one or two per cent, so it is not independent — but the market rate still respects inflation, so what falls is the **volume of transactions that clear** and yields leak upward anyway. Euro-area debt averages **8.2 years** duration, so ending QE works off slowly. End states: honour market prices, restructure (Greece, €100bn in 2012), or keep mutualising via joint debt at negative real returns. His own proposal from the 2015 Libera book *Euron tulevaisuus* is an **ECU-style** return: per-country digital wallets that find local market prices, with the general euro computed as a capital-key-weighted sum, preserving the euro as the settlement unit while adding pressure valves. Both give low odds of breakup. **Positioning:** no cash, **no bonds** (a rising curve makes fixed income a guaranteed loss), cost-efficient ETFs weighted to the Nordics and US and away from the euro area, own property, a UK pension pot, private equity LP stakes, real estate funds, the €50,000 equity savings account kept in growth names, and a reluctant tilt to value.