Private equity and venture capital in the Nordic region slowed significantly in the first half of 2008, despite high activity in 2007, according to a report by the European Venture Capital Association (EVCA).
The study, based on PEREP_Analytics data, and in association with KPMG and CapMan Group, shows that investment in the region fell by around a third in terms of the number and value of deals, compared to the same period last year.
Whilst the number of buy-out deals remained more or less the same, the value of equity invested in buy-out deals dropped by a third.
“On the transaction side, everything has come to a halt with the M&A market waiting for the financial crisis to pass the most turbulent phase,” says Heikki Westerlund, chief executive, CapMan Group.
The venture capital market has been affected too, with a 40% decline in the number of deals, leading to a 44% decrease in the total value of deals in the first half of this year. This is in stark contrast to 2007 when values jumped 41% from the previous year, to reach 8.3 billion, with venture deals accounting for 23% and buy-out deals accounting for 77%.
Fundraising in the Nordic region fell by more than 50% in the first half of 2008 compared with H1 last year.
“It is now a waiting game,” says Taus Wolfsberg, partner and head of the private equity group at KPMG, Sweden. “Private equity houses have quite a lot of money in their funds and are waiting for prices to come down before they buy and they dont want to exit their investments at lower prices if they can hold on.”
D.C.