We're all above average

As we entered Q2, deal processes - many a year in the making - were reaching the final negotiation stages en masse. No steady escalation of activity, simply a sudden return to "normal" activity levels after a drought.

So what causes this sudden surge in deals in the region? Firstly, there is the oft-cited record fundraising rounds pre-crunch, coupled with low activity over the past year and a half.

As repeatedly written, this could lead to a rush for the best deals. Although deal activity
slowed down in the first quarter of the year, and the momentum from Q4 2009 did not
continue, according to the unquote" Barometer, the drop in value was less dramatic. This could suggest that valuations are on the rise. With increased competition for deals, the biggest challenge for Nordic players will be maintaining pricing discipline, particularly as structured processes are making a comeback in the market space.

Surprisingly, the banks, the popular scapegoats of the credit boom's upward spiralling
valuations, could prove to play an important role in bidding moderation. Reports suggest
banks are cherry picking the best buyout houses, offering more favourable terms and
conditions to firms with better track records. This enforces the top-tier thesis, suggesting
that only the very best will survive.

A similar prediction is made in the Nordic unquote" and SVCA trend spotting survey,
supported by KPMG. However, what also emerged is that every fund
manager seemingly considers themselves above average. The wake-up call will most likely come with the next few rounds of fundraising.

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• Topics
• Nordics
• Performance
• KPMG
• SVCA