Private equity investors in the limelight
CapMan has continued to strengthen its Nordic position. In 2005, we studied more than 500 investment opportunities in traditional private equity investment areas (buyout, technology and life science) within our highly selective investment process. Having examined the vast majority of investment opportunities that were present in Finland, Norway, Sweden and Denmark, our funds invested in just eight companies, which represents less than 2 per cent of all the targets that we studied. During the same period we exited almost 20 companies, which produced a strong cash flow and freed resources to focus on creating value in our existing and new portfolio companies.
Private equity investors played a starring role in Nordic M&A statistics for 2005. During recent years private equity investors have assumed a more visible position in the financial world, in which the most attention is received by so-called mega buyout transactions valued upwards of €250 million. CapMan’s focus area is middle market buyouts, where the valuation levels are for the moment at a more moderate level, competition is chiefly local and the source of value creation is often expansion in the Nordic countries. In technology and life science investments, the significant R&D contributions in all Nordic countries over the years continue to create a good deal flow. CapMan has focus on slightly later stage companies in its technology and life science investments. This gives us an opportunity to select companies, which have already endured the market place.
A growing part of our national economic wealth is in the hands of institutions, which naturally want to participate in the high returns that are being generated in the unlisted sector. Service providers are required for the management of private equity flows in this segment and to put it simply, this ownership service is offered by private equity investors. CapMan offers institutional investors an effective way to invest in private equity via its dedicated funds. As our newest product area, in 2005 we launched a private equity real estate fund structured to provide investors with access to real estate investments in the form of private equity funds.
We will continue our active role in the Nordic market in 2006. And I also encourage you to be active and contact us if, for example, you need a partner to support your company’s further development. Examples of our recent operations can be read in other parts of this newsletter.
Heikki Westerlund
CEO
CapMan Plc