Finnish buyout and growth investors have continued to support the growth of small and medium-sized enterprises (SMEs) in Finland, investing over half a billion euros in 75 unlisted companies in 2022. Despite the economic uncertainties caused by the pandemic, private equity investors have maintained a stable level of investment activity over the past five years, annually investing an average of half a billion euros in around 80 SMEs to help accelerate their growth.
The success of Finnish SMEs can be attributed in part to the expertise of buyout and growth investors, who have primarily focused on supporting domestic companies seeking growth partners. Over 90% of the investments made in 2022 were directed towards domestic companies, with investments dispersed throughout the country. Companies in Central Finland and Pirkanmaa received the highest investment volumes, after Uusimaa.
The investments made by private equity investors have also yielded significant returns for Finnish companies. According to a study conducted by the Finnish Venture Capital Association and PwC in 2022, the growth of private-equity-backed companies is nine times faster in terms of turnover and five times faster in terms of number of employees than that of peer companies.
The success of Finnish SMEs has also attracted a record-breaking €3 billion in new funds between 2018 and 2022, with several growth funds that make minority investments launched in 2022. There is currently a significant amount of unallocated capital in the funds, indicating that more investments in companies seeking growth partners can be expected in the future.
However, the Finnish Venture Capital Association has also emphasized the need to remove obstacles to domestic and foreign fundraising for private equity funds and to create more competitive opportunities to attract growth capital to Finland. Despite the challenges, the success of Finnish SMEs has remained steady, with 38 successful exits through trade sales or sales to another private equity investor in 2022.
In conclusion, the Finnish buyout and growth investors have continued to support the growth of SMEs in Finland, contributing to their success even in the face of economic uncertainty. With a stable level of investment activity and record-breaking funds raised in recent years, the future looks promising for Finnish SMEs seeking growth partners.