Towards a record year in Nordic private equity
Argentum’s YTDQ3 number crunch shows that 2021 was a record-breaking year. The number of deals has never been higher, there has never been invested more capital in either the venture or buyout segments, and the annual record for PE-backed IPOs has already been broken. Still, there is one quarter that will add to these figures.
Investment activity is booming
Private equity funds made 470 investments in Nordic companies per Q3 2021. Since Argentum began analysing the Nordic market, there has never been this many deals, neither in the first three quarters of a year nor in a calendar year.
Of these, 322 were venture deals, also a new record level. According to our estimates, the amount invested in Nordic VCs skyrocketed to 2.5 billion euros. In comparison, the average investment level in a calendar year has been 968 million euros in the last five years, corresponding to an increase of 159 per cent. Among the most significant investment rounds, we find five tech companies: Gelato, Wolt, Cognite, Vivino and Epidemic Sound (see single large transactions).
When we look at buyout deals, 148 investments have been made so far in 2021, which is a record high number and 20 per cent higher than the previous record for the same period. The most significant transactions involve the pest control company Anticimex, the online classifieds service provider Adevinta, the pharmaceutical company Recipharm, the transport group Torghatten, and the grid operator Caruna (see single large transactions).
An unprecedented number of secondary exits
After a decline in recent years, PE-backed exits increased in the three first quarters of 2021, predominantly in the buyout segment. Buyout funds completed a total of 101 sales, far more than in 2020 (62). Compared with the activity in the period in the last five years, the exit level is 50 per cent above average. If this trend continues, 2021 could become a record year for divestments in the buyout segment.
Much of the growth in exits took place in the secondary market. As many as 35 per cent of all transactions had this exit route, and the number has increased by 90 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. 40 PE-supported Nordic companies went public in the three first quarters of 201, more than in the record number in a calendar year (39 in 2017).
Towards a fundraising record in 2022
According to Argentum’s overview, many Nordic PE funds, both in the venture and buyout segment, are raising capital. At the end of December 2021, more money was raised than expected at the beginning of the year, although some fund managers postponed closing until 2022 (read more). Our estimates point to a new fundraising record if a majority of these managers succeed with closing their funds.