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An Overview of Private Equity Appetite of Nordic-Based Investors – October 2015

by Matthew Frankis

  • 22 Oct 2015
  • PE

The Nordic region consists of Denmark, Norway, Sweden, Finland and Iceland (as well as Greenland, the Faroe Islands and Åland) and has a total population exceeding 26 million. In Europe, there are 1,552 LPs which are either investing or considering investing in the private equity asset class, of which 209 (14%) are located in the Nordic region. When combined, these active Nordic-based investors hold over €3.2tn in assets under management (AUM) according to data provided by Preqin’s Investor Intelligence online service.

Norway has the largest aggregate AUM in the Nordic region: its active LPs manage over €1.2tn in aggregate AUM. This value accounts for 38% of the region’s total AUM for active private equity investors. This is in comparison to LPs located in Denmark, which possess €948bn in AUM, Sweden €784bn, Finland €252bn and Iceland only €23bn. With regards to current allocations to private equity, Sweden-based Investor AB is the LP with the largest involvement in the Nordic region, with SEK 78bn allocated to third-party private equity funds.

Eighty-nine percent of Nordic-based LPs currently have a preference for committing to Europe-focused funds, as well as 49% for North America-focused vehicles and 29% for funds investing in Asia. With regards to fund type preferences, buyout vehicles are a strong favourite within the Nordic region, with 68% of LPs expressing a preference for this strategy. This is closely followed by venture capital – a preference for 63% of Nordic-based LPs.

Danish Growth Fund, a €640mn asset manager, recently made a commitment to an early stage vehicle managed by SEED Capital Denmark. As well as venture capital, the asset manager has a preference for a range of strategies including buyout, mezzanine and growth. Equally, as seen with many Nordic-based LPs, the asset manager aims to commit to Nordic-focused, and in this case Denmark-focused, private equity funds.

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