SVCA conference tackles industry reputation

Professionals at the Riskkapital 2012 conference, hosted by the Swedish Private Equity and Venture Capital Association (SVCA) in Stockholm, appeared reserved in light of the recent success in the Nordic region. Instead, discussions were focused around the future and how to sustain industry activity and reputation in the region.

A morning panel summarised the recent regulatory changes faced by the industry. Basel III was notably neglected in favour of discussions around the AIFMD and Solvency II.

Anne Holm Rannaleet, senior advisor at IK Investment Partners, felt the AIFMD affected GPs disproportionately and speculated on whether smaller buyout houses would find it fruitful to raise another fund.

Previous Skandia Liv head of buyout fund investments Adalbjörn Stefansson, currently an independent consultant to the industry, candidly discussed his view on the AIFMD. Whilst LPs are generally not opposed to appropriate regulation, he believed that private equity does not carry systemic risk, and added that the directive was protectionist and detrimental to growth within the EU.

Interestingly, Stefansson did not seem to regard Solvency II as a threat to private equity funds. "LPs can develop risk-aware models to actually increase allocation to private equity," he reflected. As unquote" previously reported, Skandia Liv plans to raise its allocation from around 6% to 10% over the next few years.

The carried-interest taxation situation was widely regarded as a stalemate. Sven-Åke Bergkvist, partner at legal firm Mannheimer Swartling, highlighted that almost no professional adviser agreed with the tax authority in its attempt to classify carried-interest as standard income. He also noted that if the authority were to win, the local private equity industry would disappear. Rannaleet described the whole affair as politicised, and stressed that people fail to make the connection between GP and LP returns.

In the afternoon, focus had shifted from regulation to reputation. Local financial journalist Torbjörn Carlbom was invited to discuss media sentiment towards private equity. "Western society demands that people with great power and wealth show themselves," he said, calling for industrial transparency and increased relations with journalists.

He compared the industry approach to that of Stefan Persson, main shareholder in clothes retailer H&M and currently ranked by Forbes as the eighth richest person in the world. Persson has traditionally been presented in a positive light by local media, according to Carlbom, thanks to his transparency and open approach to journalists.

In summary, the SVCA conference lingered little around the past, instead focusing on how to navigate the bumpy road ahead. The extent to which the Nordic buyout industry can sustain its activity seems to rely, at least partially, on how GPs respond to these issues.

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• Topics
• Nordics
• Regulation
• IK Investment Partners
• SVCA