Benelux dethroned by Nordics as world’s top-performing private equity market

The Nordic region has become the world’s top-performing private equity market, helping Western Europe consolidate its position at the top of the global PE tree, new research has revealed.

The Nordics overtook previous leaders Benelux and the UK to become the best performing PE market of 2019, data from eFront shows, although even the very top global performers saw a modest decline in returns.

eFront said the Nordics hit a 13.8% IRR in 2019, and also registered a massive drop in their selection risk, from 67.5% down to 46.3%.

Nordic TVPI hit 1.86x last year, with eFront hailing it as the “most mature market globally”, with about 90% of value already distributed.

Benelux retained its crown as king of the LBO markets in 2019, but the Nordics closed the gap with a strong year for exits.

DACH funds, meanwhile, recorded a remarkable jump in performance, as their IRR reached 10.9%, up from 5.8% one year earlier.

Chinese and Hong Kong LBO funds were positioned well above the trendline, with an IRR of 9.9%, signifying strong performance, and a notable decline in risk over the past year, eFront added

The US, meanwhile, preserved its position as the best-performing VC market globally, with an IRR of 14.3%. Italy was the leading performer in Europe, recording an IRR of 10.9%.

eFront said, “2019 was a positive year for global private equity performance, with most regions seeing rising returns as well as falling risk.

“In fact, every market operating below the risk/return trendline saw performance improvements during the year, with the exception of Eastern Europe and Russia.

“The US remains the stand-out leader on the back of internet-era gains, but its active funds also saw performance improvement during 2019. China and Hong Kong venture funds show similarly impressive return performance, but with the additional attraction of a much narrower range of outcomes among funds – a paper advantage that may wear off as this very young market sees more investments realised over the coming years.

“Western European VC funds further strengthened their position above the trendline, closely tracked by Southern European VC, albeit at a lower return and risk level.”

Source: Altassets