Weekly round-up: the changing face of Nordic private equity

Ahead of the upcoming unquote" Nordic Private Equity Forum in Stockholm on 13 May, keynote speaker Mirja Lehmler-Brown, principal at Scottish Widows Investment Partnership, spoke to Alice Murray about fund selection, an imbalance in supply and demand, and the changing perception of the Nordic market. Competition is heating up, both from within and outside the region: "The outperformance of the early funds of Nordic Capital, EQT and Segulah that stand out on a European basis is going to be hard to repeat in a more competitive environment, especially as many managers have raised substantially larger funds. Furthermore, competition is increasing at the larger end of the market; we have seen the pan-European funds and Asian sovereign wealth funds come in and win primary deals including Nets and Stokke – deals that historically would have gone to local funds," said Lehmler-Brown.

Ahead of the Congress, we are inviting our readers to share their view on the local industry; make sure you have your say here.

As the secondary market evolves, reliance upon deep entry-point discounts to drive returns is increasingly becoming a more challenging strategy. In a sponsored article for unquote", Capital Dynamics argued the need for secondary investors to find new ways to unearth hidden value. "Having a global platform that spans Europe, the US, Latin America and Asia is vital for handling transactions from both the GP and LP perspective. It is also critical for uncovering other factors unrelated to pricing, including counterparty risk and local practices, and provides a much better chance to structure a deal directly," said Joseph Marks, managing director and head of secondaries at Capital Dynamics.

Writing exclusively for unquote", Alvarez & Marsal managing director Scott Pinfield argued the need for investors to focus on cash management to drive shareholder value in an IPO process. Cash management is particularly important for non-retail firms, Pinfield argues, a number of which are considering flotations. But work must be done first to ensure a lucrative listing. "Cash and working capital can provide a springboard to a successful listing. If the end goal is materially improving shareholder value, certain actions need to be taken pre-listing. A real advantage can be gained by permanently reducing working capital and using the subsequent cash generated to either drive down debt or boost investment spending to drive future revenue and EBITDA growth," wrote Pinfield. 

That's all from me this week but if you have any comments on this week's analysis, please send your thoughts to amy.king@incisivemedia.com.

You can continue to follow me and the rest of the unquote" team via @unquotenews for all the latest private equity and venture capital updates, and of course on unquote.com.

Amy King
Senior Reporter, unquote"

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