A healthy outlook

After mounting speculation over when the market would turn following years of excess, leverage, returns and sheer volume, 2007 will be remembered as the year when it finally came to a halt. The effect of the credit crisis will be carried into this year, with market participants saying we have only seen the beginning of the long-term depths of the subprime crash. The complexity of financial instruments based on bad debts and the extent to which these have been used has left the market with great uncertainty. The major international banks have axed staff significantly, and the write-downs of these same banks are reaching new heights.

The Nordic markets have managed to stay afloat in these rocky times, but even here substantial losses have occurred. One of the biggest scandals so far is Terra Securities, the Norwegian investment bank that lost its licence and declared bankrupt after having sold complex subprime instruments to municipalities in the north of Norway. The municipalities exposed to these complex products got their values wiped out, creating further jitters in the market.

On a more upbeat note, the year's venture and buyout statistics (presented on page 23) show that despite the credit squeeze, dealflow continues to look healthy. Although this is mostly in the mid-market, there is also a strong will among GPs to continue to do deals at the larger end. On 13 November, a consortium led by EQT made a bid to de-list Securitas Direct for SEK 9.6bn. This had been on the cards for some time, but assembling the financing to support the transaction proved to be a struggle. To further complicate the process, the board of Securitas Direct recommended the shareholders reject the offer (page 34). If EQT successfully wins shareholders confidence, the delisting will send a signal to the market that large-cap deals are still possible in the Nordics, which makes it more attractive relative to its European neighbours.

Nordic unquote" also celebrated this year's top-notch achievements in the Nordics at its annual event in Stockholm. See page 20 to get an overview of this year's winners.

Finally, I would like to wish you all the best for 2008. I am looking forward to following the Nordic market this year, and I am sure that you will continue to do great things.

Yours sincerely,

Linn Ronning

Nordic Editor, unquote"

Tel: +44 20 7484 9824

linn.roenning@incisivemedia.com.

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