NORDIC - GPs still in waiting

According to Harold Kaiser, founder and partner of Litorina Kapital, the price inflation seen in the mid-market buyout segment in the Nordic region in recent years has been largely the result private equity players themselves, as a combination of high competition and abundant leverage and capital drove prices up. Kaiser and Callerstrom now expect prices to return to the lower long-term average. Similarily, Johan Hultner of RBS suggested debt levels would 'normalize' to the levels of three to four years ago.

The entry multiples of recent vintages also impacts the exit market of today. "You won't exit until you have a decent return," Kaiser stated, before outlining a meager outlook for exit numbers in the near future. As a result, the market for secondaries direct players is abound with opportunities. Buyout houses are in the meantime focusing on portfolio management, often making add-on acquisitions in full equity deals.

The comments followed the unsurprising revelation by Daniel Schmidt of CEPRES (Center for Private Equity Research) that both deal volume and value across Europe had dropped substantially in recent months.

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