Nordic activity set to boom as summer ends

Viktor Lundvall
05 August 2010

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Following a strong increase in activity for the first half of 2010, the Nordic market is currently going through its seasonal summer lull. Viktor Lundvall takes a closer look at what to expect after the regionтs summer break.

According to unquote" statistics, deal flow in the first half of 2010 has seen a marked increase compared to the previous year, up 38% by volume and 280% by value. Signs of rising activity levels were already evident towards the end of last year, and the positive trend has continued up to the start of the region's long summer holidays. Compared with other European regions, Nordic deal activity has seen the largest quarterly increase in 2010, which suggests that the region is recovering well following the recession.

Expectations are high as people start returning from their vacations, and reports suggest a long rest may have been good preparation, with a busy outlook on the cards in the Autumn. A leveraged finance professional active in the region was in a buoyant mood when asked about their deal pipeline: "We see many deals coming up and availability of debt is continuously increasing, which should further enhance future deal flow".

A factor that will increase confidence in the region is the strong macroeconomic signals emanating from countries in the region. Sweden in particular has recorded very strong GDP growth in the second quarter, up 3.7% compared to the year before and 0.5% more than predicted. Furthermore, the strong economy is likely to increase the number of IPOs this autumn, as one corporate financier notes. Indeed, there have already been successful IPOs of previously private equity-backed companies, such as Chr Hansen, earlier this year.

The expected increase in activity comes as funds are reaching the end of their investment period, with many GPs expected to make numerous investments to beat the deadline. Cynics argue that the heightened activity levels in the second quarter are already showing signs of this.

Nonetheless, as people return from the Nordic summer holiday, they can rest assured that there will be plenty of work ahead. The outlook compared to last year is more positive, and activity is set to increase across the board.