swedish private equity activity - svca

2020 Swedish Private Equity ActivityFundraising, Investments, Divestments, Industry Significance,

and Performance

FundraisingFundraising statistics explained

Funds monitored are direct private equity funds that primarily focus on investments in

Europe.

Funds raised are recorded in the country where the advisory team raises/manages the

fund.

Funds raised are the incremental amount of capital raised during the year.

Funds included in the statistics: private equity funds making direct private equity

investments, mezzanine private equity funds, co-investment funds, and

rescue/turnaround funds.

The following funds are excluded from the statistics: infrastructure funds, real estate

funds, distressed debt funds, primary funds of funds, and secondary funds of funds.

Fundraising Summary

• SEK 69 billion was raised by funds with advisory teams in Sweden during 2020. An increase of 36%

compared to 2019 as buyout fundraising increased.

• Total fundraising since 2007 amounts to SEK 681 billion.

• Institutional investors are the largest investors in the funds. Pension funds (31%), asset managers (23%),

sovereign wealth funds (10%).

• 84% of the funds raised originate from investors outside of Sweden:

The Nordics (9.9%), UK and Ireland (8.9%), and the DACH region (7.9%) are the largest sources of

European funds.

North America (28.8%) is the largest source of non-European funds, followed by Australia and Asia

(14.1%).

All Private Equity FundraisingFunds raised by year 2007-2020

Source: SVCA / EDC

43

69

10 10

53

4

49

29

66

33

69

129

50

69

0

20

40

60

80

100

120

140

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

SE

K b

illio

n

All Private Equity FundraisingFunds raised by investor type 2007-2020

Source: SVCA / EDC

Academic inst., endowments & foundations

5% Banks4%

Corporate investors6%

Capital markets2%

Family offices & private individuals8%

Fund of funds & other asset managers

23%

Government agencies3%

Insurance companies8%

Pension funds31%

Sovereign wealth funds10%

All Private Equity FundraisingFunds raised by geography 2007-2020

Source: SVCA / EDC

8.9%

6.6%0.0%

Rest of World

1.5% Australia

& Asia

14.1%

North America

28.8%

Unclassified

Europe

6.0%

7.9%

0.5%

15.6%

Rest of Nordics

9.9%

InvestmentsInvestments statistics explained

Market statistics are an aggregation of figures according to the location of the portfolio

company. At the Swedish level, this relates to investments in Swedish companies

irrespective of the location of the private equity firm.

Equity value: the amount of capital invested when acquiring shares in an enterprise.

The equity value includes equity, quasi-equity, mezzanine, unsecured debt and secured

debt provided by the private equity firm.






Investments Summary

• The total equity value invested by private equity was SEK 36 billion, a slight decrease on 2019 due to lower

buyout activity.

• The number of companies backed by private equity increased to 442.

Venture capital investments increased 24% year-on-year to SEK 4.82 billion, 340 companies received

venture capital funding in 2020.

Growth capital investments increased 339% year-on-year to SEK 10.56 billion, 47 companies received

growth capital in funding 2020.

Buyout investments decreased 45% year-on-year to SEK 21.07 billion, 55 companies received buyout

funding in 2020.

• Business Products & Services, ICT and Consumer Goods & Services attracted the most buyout

investments.

• ICT, Biotech and Healthcare and Consumer Goods & Services attracted the most venture and growth capital

investments.

• Comparing investments to GDP, Sweden had the highest amount of venture and growth capital investments

in Europe.

All Private Equity InvestmentsAmount by stage of investment 2007-2020

Source: SVCA / EDC

*Buyout includes Rescue/Turnaround and Replacement Capital

25.22

17.36

7.64

20.30

26.62

18.16

5.30

17.1114.01

15.99

21.46

26.29

38.35

21.07

1.38

0.97

1.41

4.10

1.54

1.01

1.09

0.90

1.110.74

2.72

1.39

2.40

10.56

3.97

5.01

3.19

2.89

2.46

1.96

2.13

2.61

1.68

2.24

2.48

4.47

3.88

4.82

0

5

10

15

20

25

30

35

40

45

50

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

SE

K b

illio

n

Buyout* Growth capital Venture capital

All Private Equity InvestmentsNumber of companies 2007-2020

Source: SVCA / EDC

*Buyout includes Rescue/Turnaround and Replacement Capital

66 65 65 5941 52

32 45 47 42 53 62 63 55

18 22 30 52

34 2429

25 3119

1731 15 47

407

299318

345

323

375

348

382335

290 274

333

318

340

0

100

200

300

400

500

600

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Num

ber

of

com

panie

s

Buyout* Growth capital Venture capital

Buyout InvestmentsInvestments by equity bracket 2007-2019

Source: SVCA / EDC

2.30 1.84 2.16 2.04 1.25 1.70 1.24 1.37 1.65 1.15 1.40 1.24 1.44

5.174.94

2.974.58

4.61 3.93

1.933.37 3.67 5.00 4.60 4.39

5.56

2.751.88

0.52

2.31

0.89 1.84

0.91

1.782.81

3.58 2.92

6.391.77

1.00

1.20

2.37

1.43

3.58

1.08

1.05

1.28

4.02

2.34

2.47

3.89

6.72

2.57

5.56

4.47

2.55

2.48

1.90

1.88

3.28

2.94

6.70

5.07

3.3913.82

4.21

6.95

4.17

7.36

8.52

18.86

0

5

10

15

20

25

30

35

40

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Bill

ion S

EK

Small (<€15m) Lower mid-market (€15m - €50m) Core mid-market (€50m-€100m) Upper mid-market (€100m-€150m) Large (€150m- €300m) Mega (>€300m)

Buyout InvestmentsInvestments by equity bracket 2007-2020

Source: SVCA / EDC

2.30 1.84 2.16 2.04 1.25 1.70 1.24 1.37 1.65 1.15 1.40 1.24 1.83 1.54

5.174.94

2.974.58

4.61 3.93

1.933.37 3.67 5.00 4.60 4.39

6.064.35

2.751.88

0.52

2.31

0.89 1.84

0.91

1.782.81

3.58 2.92

6.39 1.77

2.38

1.00

1.20

2.37

1.43

3.58

1.08

1.05

1.28

4.02

2.34

2.475.21

1.22

6.72

2.57

5.56

4.47

2.55

2.48

1.90

1.88

3.284.63

6.02

6.70

5.07

3.3913.82

4.21

6.95

4.17

7.36

8.52

18.85

5.55

0

5

10

15

20

25

30

35

40

45

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

SE

K b

illio

n

Small (<€15m) Lower mid-market (€15m - €50m) Core mid-market (€50m-€100m) Upper mid-market (€100m-€150m) Large (€150m- €300m) Mega (>€300m)

Venture & Growth Capital InvestmentsInvestments by stage 2007-2020

Source: SVCA / EDC

150 113 45 44 25 54 61 62 18 176 220 233 236 280

1,9832,528

1,597 1,493 1,132 885 877 1,189 9361,245 1,296

2,331 2,6313,410

1,835

2,369

1,543 1,3571,298

1,018 1,1971,362

731817 965

1,909 1,010

1,1261,377

969

1,407

4,102

1,544

1,008 1,090897

1,112742

2,716

1,391 2,405

10,559

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

SE

K m

illio

n

Seed Start-up Later stage venture Growth capital

Buyout, Venture & Growth Capital Investments Investments by sector 2007-2020

Source: SVCA / EDC

Buyout investments by sector Venture & Growth capital investments by sector

*Other also includes Chemicals and materials, Construction, Real estate *Other also includes Agriculture, Chemicals and materials, Construction, Real estate, Transportation

Agriculture3%

Business products and

services27%

ICT18%

Consumer goods and services

18%

Energy and environment

3%

Financial and insurance activities

9%

Biotech and healthcare

14%

Transportation4%

Other*4%

Business products and services

7%

ICT40%

Consumer goods and services13%

Energy and environment

8%

Financial and insurance activities

4%

Biotech and healthcare

24%

Other*4%

All Private EquityInvestments as % of GDP 2020

Source: SVCA / EDC

*Other CEE consists of Ex-Yugoslavia and Slovakia

**Other Europe consists of Cyprus, Iceland, Liechtenstein, Malta, San Marino, Vatican City

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

% o

f G

DP

2007-2020 annual average

BuyoutInvestments as % of GDP 2020

Source: SVCA / EDC



0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

% o

f G

DP

2007-2020 annual average

Venture & Growth CapitalInvestments as % of GDP 2020

Source: SVCA / EDC



0.0%

0.1%

0.1%

0.2%

0.2%

0.3%

0.3%

0.4%

% o

f G

DP

DivestmentsDivestments statistics explained

Market statistics are an aggregation of figures according to the location of the portfolio

company. At the European level, this relates to divestments of European companies

irrespective of the location of the private equity firm.






Divestments Summary

• For buyouts between 2007-2020, the main exit routes by value were public offerings (30%), sales to other

private equity firms (26%), and trade sales (23%).

• For venture capital between 2007-2020, the main exit routes by value were trade sales (30%), public

offerings (20%), and write-offs (12%).

• For growth capital between 2007-2020, the main exit routes by value were sales to other private equity firms

(50%), trade sales (30%), and management/owner buy-backs (6%).

• For buyouts between 2007-2020, the main exit routes by number of companies were trade sales (31%),

sales to another private equity firm (22%), and public offerings (17%).

• For venture capital between 2007-2020, the main exit routes by number of companies were divestments by

other means (25%), trade sales (24%), public offerings (12%), and write-offs (12%).

• For growth capital between 2007-2020, the main exit routes by number of companies were trade sales

(41%), sales to another private equity firm (13%), and public offerings (13%).

Divestments by Exit RouteAs % of total amount 2007-2020

Sale to trade buyers

Divestment by public offering

Write-off

Repayment of preference shares/loans or mezzanine

Sale to another private equity firm

Sale to financial institutions

Management/owner buy-back

Divestment by other means

37%

20%

12%

1%

10%

6%

9%

5%

23%

30%

3%

7%

26%

5%2% 4%

Venture capital

SEK 19.2 billion

divested at cost

Buyout

SEK 179.1 billion

divested at cost

30%

4%

3%1%

50%

4%

6% 2%

Growth capital

SEK 11.5 billion

divested at cost

Divestments by Exit RouteAs % of total number of companies 2007-2020

Sale to trade buyers

Divestment by public offering

Write-off

Repayment of preference shares/loans or mezzanine

Sale to another private equity firm

Sale to financial institutions

Management/Owner buy-back

Divestment by other means

Venture capital

783 companies

divested

Buyout

405 companies

divested

Growth capital

119 companies

divested

24%

12%

12%4%

8%

4%

11%

25%

31%

17%

3%10%

22%

7%

4%6%

41%

9%5%5%

13%

3%

13%

11%

Private Equity and the Swedish EconomySignificance statistics explained

Statistics on portfolio companies are an aggregation of the latest available public data,

presenting turnover (using 2019 data) and the number of employees (using 2018 data).

Swedish portfolio companies are included, irrespective of the location of the private

equity firm.

Private Equity Represents a Substantial Part of the Swedish Economy

• There were a total of 1,393 Swedish portfolio

companies in 2019, 513 buyout-backed, and 880

venture capital-backed.

• Global revenues in Swedish portfolio companies

amounted to SEK 660 billion in 2019.

• Swedish portfolio companies employed 183,172

people in 2018, amounting to 3.59% of the active

workforce in Sweden that year.

Source: SVCA / Retriever / SCB

Number of

companies%

Revenues

2019%

Employees

2018%

Total 1,393 100 660 100 183,172 100

Buyout 513 37 529 80 164,604 90

Venture 880 63 131 20 18,568 10

1,393 660 bSEK 183,172

37%

80%90%

63%

20%10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Number of Companies Revenues Employees

Buyout Venture Capital

Global Revenues of Private Equity-Backed Swedish Portfolio Companies

• Global revenues grew by about 23% between 2017

and 2019, equivalent to an increase of SEK 123

billion.

• Venture capital portfolio companies represented

20% of total global revenues in 2019, while

representing 12% in 2017, as the number of later

stage venture capital-backed portfolio companies

increased.


Number of

companies

2017

Revenues

2017

Number of

companies

2019

Revenues

2019

Total 1,160 537 1,393 660

Buyout 406 475 513 529

Venture 754 62 880 131

537

660

0

100

200

300

400

500

600

700

Revenues 2017 Revenues 2019

Bill

ion S

EK

Number of Employees in Private Equity-Backed Swedish Portfolio Companies

• Swedish portfolio companies employed 183,172

people in 2018, compared to 169,542 in 2017. This

represents 3.59% of the active workforce in

Sweden compared to 3.38% in 2017.

• Both the relative and absolute number of

employees increased between 2017 and 2018, as

the number of portfolio companies increased.

• Buyout portfolio companies accounted for most of

the employed individuals in 2018 (90%). However,

the number attributable to venture capital increased

in relative and absolute terms between 2017 and

2018.


Employees 2017 % Employees 2018 %

Total 169,542 100 183,172 100

Buyout 155,964 92 164,604 90

Venture 13,578 8 18,568 10

169,542 183,172

5,021,800 5,097,400

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Number of Employees2017

Active Workforce 2017 Number of Employees2018

Active Workforce 2018

Performance of European Private EquityPerformance statistics explained

Statistics on private equity performance are taken from Invest Europe’s 2019

benchmark report The Performance of European Private Equity, with data from

Wellershoff & Partners, based on Cambridge Associates, with special permission from

Cambridge Associates.

Performance of European Private Equity

• Invest Europe’s 2019 benchmark report The Performance of European Private Equity shows that the asset

classes associated with private equity (buyout, growth capital, venture capital) clearly outperformed listed

equities:

Buyout has delivered a net internal rate of return (IRR) of 15.00% vs. 5.84% for the MSCI Europe and a

multiple of invested capital (MOIC) of 1.67x vs. 1.22x.

Growth capital has delivered a net IRR of 13.28% vs. 7.32% for the MSCI Europe and 11.71% for the

S&P Europe Small Cap Growth and an MOIC of 1.52x vs. 1.24x for the MSCI Europe and 1.46x the S&P

Europe Small Cap Growth.

Venture capital has delivered a net IRR of 9.77% vs. 8.39% for the MSCI Europe and an MOIC of 1.70x

vs. 1.38x for the MSCI Europe.

• Relative performance compared to listed equities is calculated using the mPME methodology as explained

in Invest Europe’s research report Benchmarking Public & Private Markets with the Public Market Equivalent

(PME).

Performance of European Buyout Funds

Source: Invest Europe – The Performance of European Private Equity, with data from


Cambridge Associates

IRR and mPME of European buyout funds MOIC and mPME of European buyout funds

15.00%

5.84%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Buy-out funds mPME (MSCI Europe)

1.67

1.22

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Buy-out funds mPME (MSCI Europe)

Performance of European Growth Capital Funds




IRR and mPME of European growth capital funds MOIC and mPME of European growth capital funds

13.28%

7.32%

11.71%

0%

2%

4%

6%

8%

10%

12%

14%

Growth capital funds mPME (MSCI Europe) mPME (S&P Europe Small CapGrowth)

1.52

1.24

1.46

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Growth capital funds mPME (MSCI Europe) mPME (S&P Europe Small CapGrowth)

Performance of European Venture Capital Funds




IRR and mPME of European venture capital funds MOIC and mPME of European venture capital funds

9.77%

8.39%

0%

2%

4%

6%

8%

10%

Venture capital funds mPME (MSCI Europe)

1.70

1.38

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Venture capital funds mPME (MSCI Europe)

Glossary

Fundraising Glossary

Types of investors

Corporate investor: Corporations manufacturing products or delivering non-financial services.

Endowment: An investment fund established by a foundation, university or cultural institution providing capital donations for specific needs or to further a company’s

operating process. Endowments are generally structured so that the principal amount invested remains intact, (for perpetuity, for a defined period of time, or until

sufficient assets have been accumulated to achieve a designated purpose).

Family office: An entity that provides services to one or more affluent families, including investment management and other services, (accounting, tax, financial and

legal advice etc.).

Foundations: A non-profit organization through which private wealth is distributed for the public good. It can either donate funds and support other organizations or

provide the sole source of funding for their own charitable activities.

Fund of funds: A private equity fund that primarily takes equity positions in other funds.

Government agencies: Country, regional, governmental and European agencies or institutions for innovation and development.

Other asset manager: A financial institution (other than a bank, endowment, family office, foundation, insurance company or pension fund) managing a pool of capital

by investing it across different asset classes with the purpose of generating financial returns. It may include private equity direct funds that occasionally make indirect

investments but excludes fund of funds that are a standalone option.

Pension funds: A pension fund that is regulated under private or public sector law.

Sovereign wealth funds: State-owned investment funds investing in foreign direct private equity funds to diversify their portfolio.

Investments Glossary

Venture Capital

• Seed: Funding provided before the investee company has started mass production/distribution with the aim to complete research, product definition or product

design, also including market tests and creating prototypes. This funding will not be used to start mass production/distribution.

• Start-up: Funding provided to companies, once the product or service is fully developed, to start mass production/distribution and to cover initial marketing.

Companies may be in the process of being set up or may have been in business for a shorter time but have not sold their product commercially yet. The

destination of the capital would be mostly to cover capital expenditures and initial working capital.

• Later-stage financing: Financing provided for an operating company, which may or may not be profitable. Late-stage venture tends to be financing into

companies already backed by VCs, typically in C or D rounds.

Growth Capital

A type of private equity investment (often a minority investment) in relatively mature companies that are looking for primary capital to expand and improve operations or

enter new markets to accelerate the growth of the business.

Buyout

Financing provided to acquire a company. It may use a significant amount of borrowed capital to meet the cost of acquisition. Typically, by purchasing majority or

controlling stakes.

Rescue/Turnaround

Financing made available to an existing business, which has experienced financial distress, with a view to re-establishing prosperity.

Replacement Capital

Minority stake purchase from another private equity investment organization or from another shareholder or shareholders.

Divestments Glossary

Exit route

Management/Owner buy-back: The buyer of the company is its management team.

Public offering:

• First divestment following flotation (IPO): The sale or distribution of a private company’s shares to the public for the first time by listing the company on the stock

exchange.

• Sale of quoted equity post flotation: It includes sales of quoted shares only if connected to a former private equity investment, e.g., sale of quoted shares after a

lock-up period.

Repayment of preference shares/loans or mezzanine: If the private equity firm provided loans or bought preference shares in the company at the time of

investment, then their repayment according to the amortization schedule represents a decrease of the financial claim of the firm into the company, and hence a

divestment.

Sale to another private equity firm: The buyer of the portfolio company is a private equity firm.

Sale to a financial institution: A financial institution is an entity that provides financial services for its clients:

• Depositary institutions: deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust

companies, and mortgage loan companies.

• Contractual institutions: Insurance companies and pension funds.

• Investment institutes other than direct private equity firms.

Trade sale: The sale of a company's shares to industrial investors.

Write-off: The value of the investment is eliminated, and the return to investors is zero or negative.

Note: Recapitalizations are not considered in the divestment statistics.

swedish private equity activity - svca

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