Nordic Survey 2014

Private equity in the Nordic region has experienced a turbulent year, with sluggish dealflow and continued concerns over the uncertain regulatory environment.

More than half (56%) of respondents to our survey attributed Sweden's drop in dealflow to the uncertain regulatory environment. The headline issue has of course been the Swedish tax authority's continued attempts to qualify carried interest as income and, hence, levy income tax and social security charges thereon.

The attention has most recently been centred on Nordic Capital's successful appeal in the high-profile carried interest tax battle against Skatteverket last year. The tax authority has since filed a counterappeal with the Supreme Court. The decision as to whether or not the Supreme Court will grant leave of appeal will be made over or after the summer – this latest appeal only adds to continued uncertainty in the Swedish market.

Fortunately, activity is picking up, but from a low level. In Sweden, deal volume is still to recover fully: there were just 18 investments in Q1 2014 in the country. This is up from 14 in the same period last year but significantly lower than the 44 seen in Q2 2012. The contrast between the overall deal value is almost as stark – down from €2.6bn in Q2 2012 to €752m in the first three months of 2014.

View the full survey, with comments and analysis here. 

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