Table of Contents
In the last two years, the pandemic created large instabilities in the financial markets. In the first months of 2022, the war in Ukraine has prolonged the turbulence in the market. Historically, private equity funds have shown that they handle complex and demanding times. I believe that this will also be the case under these circumstances.
Looking back at 2021, it was a truly remarkable year in the Nordic private markets. After the pandemic, we got a catch-up effect with deals, exits, and fundraising being pushed into the new year. Records were broken in both the venture and buyout segments. Prices for companies have increased steadily in the last year but might have peaked in 2021.
Some deals and trends stand out, and we interviewed three companies representing these. Spond is an app that organises and finances sports and group activities from grassroots football to scout and music bands, in which Verdane's new impact fund invested during the year. Iteam, a newly formed group of IT services companies, is "a great buy-and-build case that shows private equity at its best", according to the PE fund Equip. Pinja aims to become a global actor in the industrial SaaS market with Norvestor as its new active owner.
War, market instabilities and rising interest rates will probably affect the investment appetite somewhat in the coming years. The exit activity will be moderate, but fewer companies will go to the public markets than in the landmark year of 2021. We see that private equity funds more often buy and sell companies between each other, which is a trend I believe will continue. When looking at our fundraising overview, there has never been a more extensive pipeline, but a more demanding financial climate might push some of the fund closings.
Even in uncertain times in Europe and the world, the private equity model and active ownership have shown time and time again that it is well-equipped to handle challenges in the market. After several years in the industry and fifteen years as head of Argentum, I am still impressed by this model. Private equity creates value for society and transforms growth companies into international winners. The model is also solid throughout various crises is a good sign for an ever-changing world. I believe it shows that active ownership will play an integral role in the large-scale readjustment of our economies in the coming decades.