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Nordic-Based Investors’ Appetite for Private Equity – February 2015

by Alastair Hannah

  • 19 Feb 2015
  • PE

The Nordic region (comprising Denmark, Finland, Iceland, Norway and Sweden) has a total population of approximately 26 million people, but the region contains a disproportionately large amount of capital at its disposal owing to export revenues. Preqin’s Investor Intelligence online service currently tracks 199 active LPs based in the Nordic region, which together manage approximately €3.4tn in assets. Over a third (35%) of these investors are actively looking to invest in private equity.

By total assets under management, Norway-based LPs are the most dominant, with €1.6tn under management. This is followed by those investors based in Sweden (€905bn), Denmark (€638bn), Finland (€241bn) and Iceland (€15.7bn). Government Pension Fund Global, Norway’s sovereign wealth fund, is the largest investor in the region with total assets of NOK 5.5tn.

In terms of geographic preference, 81% of Nordic-based private equity investors have a preference for or have previously invested in Europe. Other preferable regions for private equity exposure are North America (41%), Asia (31%) and emerging markets (29%). In terms of fund type preferences, buyout and venture capital vehicles are the most favoured, with 71% and 52% of Nordic-based investors respectively demonstrating a preference for these strategies.

Recent investor activity in the region includes the €50bn pension fund, Danica Pension, committing €107mn to a separate account mandate managed by Gro Capital. It will target medium-sized businesses in Denmark and expects to allocate between DKK 50mn and DKK 200mn to each company.

The substantial pools of capital held by Nordic-based institutional investors and the region’s continued appetite for private equity exposure will continue to attract the attention of GPs from across the globe. Competition for commitments will exist among GPs as the large capital pools are distributed across relatively few institutions. 

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