Three out of four Finnish private equity funds established between 2009 and 2020 have outperformed the stock market, Tesi's research estimates.
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A large part of the funds are still ahead of European benchmarks and stock market returns, Tesi estimates.
According to the study, 75 percent of the Finnish private equity funds established between 2009 and 2020 exceed the returns produced by the listed market.
The best quarter of the funds have produced up to 2.5 times more than the listed market.
In the comparison, the capital called and returned by the funds and the unrealized value are indexed to the stock exchange on the value dates of the transactions. The OMX HG total return index of the Helsinki Stock Exchange has been used as a comparison index, Tesi explains about the research method.
Tesi is a Finnish state capital investment company that makes investments in private equity funds and directly in growth companies.
Particularly venture capital funds that invest in startups have performed well. Finnish funds established between 2009 and 2015 reach 20 percent annual returns. More than half of these funds are ranked in the best return quarter compared to European benchmarks, Tesi states.
Compared to previous surveys, the dispersion of the returns of the group of funds has narrowed: the returns of the lower-yielding funds have risen.
In years The returns of the venture capital funds that started operating in 2016–2020 still look modest. The annual rate of return has decreased from last year's 18 percent to 11 percent.
Tesi's senior analyst who compiled the report Arttu Suominen according to a large part of these funds are still in the investment phase, and the increase in value has not yet occurred.
“Also, the slowed M&A market affects the returns of newer funds in particular, as exits from companies have slowed down,” Suominen estimates in the press release.
To more established ones the year 2023 brought almost no changes to the returns of buyout and growth funds that invest in growth companies: the annual return percentage in the older (2009–2015) funds was 16 percent and 13 percent in the newer ones.
The survey includes 42 Finnish funds, of which 22 were buyout and growth funds and 20 were venture capital funds. There are 19 older (2009–2015) funds in the study and 23 newer (2016–2020) funds.
All these funds have a total of approximately 4.3 billion euros in collected funds.
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