Explosive growth on the way out of the pandemic
After suffering a slight setback when the coronavirus pandemic hit the markets in early 2020, Nordic private equity is back. We saw rising trends after the summer and towards the end of last year, a growth that has continued into 2021. The number of investments in the venture and buyout segments has never been higher in a half-year period, we are close to a record within PE-backed exits, and the annual record for PE-backed IPOs is soon smashed.
Investment activity is booming
A total of 321 investments was made in Nordic private equity in the first half of 2021. For the first time in Argentum’s monitoring of the market, there are over 250 transactions in half-year period.
Of these, 212 were venture deals, also a new record level. According to our estimates, the amount invested in Nordic VCs skyrocketed, amounting to 1.9 billion euros. In comparison, the same amount was collected in the five past H1 periods combined. Among the significant investment rounds, we find four tech companies: Wolt, Cognite, Vivino and Epidemic Sound (see single large transactions).
Looking at buyout deals, it is the first time we see a three-digit number in a half-year period. In addition to many transactions, the amount invested was very high with a growth of 111 per cent compared to the average in the last five years. The most significant transactions involve the pest control company Anticimex, the pharmaceutical company Recipharm, the transport group Torghatten, and the grid operator Caruna (see single large transactions).
There have never been more deals in a half-year period in the Nordic PE market.
Unprecedented number of secondary exits
After a decline in recent years, exits are increasing in H1, predominantly in the buyout segment. Buyout funds completed a total of 68 exits, a figure that is equivalent to the activity in the whole of 2020. Compared with the average for the period in the last five years, the exit level is 40 per cent above. If this trend continues, 2021 could be a record year for divestments in the buyout segment.
Much of the growth in exits took place in the secondary market. As many as 4 of 10 transactions had this exit route, and the number has increased by 118 per cent compared to the average of the last five years (read more). With a lot of risk capital on Nordic marketplaces, IPOs have also become an attractive exit strategy for active owner funds. 38 PE-supported Nordic companies have gone public during the first half of the year, close to the record number in a calendar year (39 in 2017).
Many funds are raising capital
After many huge funds closed fundraising rounds in 2020, the level declined in the first half of 2021. We see that many funds are still in the market to raise capital and expect a solid end to the year. If the predicted fundraising succeeds, there might be a new annual record in the venture segment (read more).