Riskkapital 2008

Don't worry, be happy

A panel consisting of Kurt Bjorklund of Permira, Bjorn Saven of Industri Kapital, Gustav Bard of 3i and Morgan Olsson of Nordic Capital shared their thoughts with the audience on the current status of the Nordic buyout market. All four agreed that after three years of unusually good times, the market has now returned to a more normalised situation where buyout houses will have to work even harder to add value to portfolio companies. Bard said that cyclical profitability in private equity will continue even if a recession hits the global markets. The mid-market segment is still open for business and it is possible to get up to EUR1.2bn in leverage, noted Saven.

On the political agenda

Sweden's minister for local government and financial markets Mats Odell kicked off the day by stating the importance of private equity for the Swedish economy. He said that private equity has constantly outperformed publicly-listed companies with 21.1% average growth in comparison with 7.6% for listed firms. The numbers of employees in Swedish portfolio companies has increased by 10%, while listed companies have not seen any increase in the number of staff on average. Odell touched on taxation, saying he would clean up the jungle of legislation impeding private equity, and said the Government is working on tax initiatives to boost activity.

New IT bubble?

Index Ventures is well acquainted with the Nordic market having been part of the best ever Nordic (and European) venture exits: Skype and MySQL. Partner Ben Holmes noted some similarities in the current venture market to the trends seen in the IT heyday leading up to the bursting of the bubble. He said that uncanny business ideas, company names and over-valuations that were seen in 2001 can be found in today's market as well. However, he said the market is better suited to this new online wave because the internet is firmly established in all markets over the world. He also stressed that "democratisation" should be the theme when selecting tomorrow's venture home-runs.

Women to save Europe

The lack of women in venture capital and private equity, and in finance in general, is a fact of life. Herta von Stiegel, executive chairman of Stargate Capital Investment Group, gave insights as to why there is a lack of female entrepreneurs and investors. She presented statistics that illustrated that in businesses where 30% of the management were female, average EBIT was 48% higher and 10% higher ROE than in non-female management groups. The audience wanted to know if women were known to be more averse to risk than men. von Stiegel affirmed the theory but noted that such an aversion could be both an advantage and a disadvantage; women could be slower to react, but could also undertake more calculated risks.

The SVCA Awards 2008 were presented the same evening. Segulah won fundraiser of the year for its Segulah IV fund, which successfully closed on SEK 5bn in October 2007. Scope Capital was awarded best venture exit of the year for its involvment in the sale of MySQL to Sun Microsystems. Scope was the only Swedish venture firm that had been involved in the businesses since it started to raise third party funding in 2001. The Swedfundpriset, the year's most socially responsible investment, was given to Huvudkontoret for its investment in Left is Right.

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