Vendor scepticism
While researching the Nordic chapter of the European Fundraising Review, it became evident that GPs and LPs alike expressed concern over future dealflow. From 1998 to 2008, the number of fund closes doubled, and the amount of capital raised quadrupled.
Needless to say, competition for the best deals has increased.
One GP said the market could become over-crowded, contributing to an upward spiralling
of prices. Indeed, some also fear that the combination of record amounts of capital raised pre-crunch and the deal dearth of the past 18 months could lead to a race for deals - potentially impacting their quality.
Added to this is vendor scepticism towards the private equity ownership model. In a
recent panel discussion in London, organised by Investec Private Bank, entrepreneurs
revealed a far more negative attitude towards the industry than industry research suggests.
Although the mood in the Nordic region is fairly positive relative to other European
markets, the recent push for an increase in regulation initiated by former Danish prime
minister Poul Nyrup Rasmussen has impacted people's views towards private equity for
the worse (read more in the March edition of Nordic unquote", which you can download here).
The industry itself is convinced of its value-add, but a change in attitude among the public should be heeded. It is a communication challenge that should be met head-on with a proactive attitude towards transparency and openness.
Rikke Eckhoff
Nordic editor - unquote"
Follow me on Twitter: @rikkeeckhoff
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