The volume of exits by private equity firms across the Nordic countries in Q2 2020 fell to its lowest point in more than a decade, according to Unquote Data.

Unquote recorded just 18 sales of PE-backed companies across the Nordic region in the second quarter, marking a low not seen even during the global financial crisis.

While the number of realisations recorded every second quarter has been on a steady downward trend over the past three years, the sharp drop of 55% in exit volume in Q2 2020 compared with Q2 2019 is unprecedented. Compared with Q1 2020, which recorded an already low 27 exits, the decrease is still more than 33%.

The slowdown in exit activity in the Nordic countries is in line with some other European regions, including southern Europe, where exit volume fell by 65% year-on-year, and France, which recorded a 60% decline.

The subdued activity reflects the reluctance shown by GPs during the peak of the pandemic to initiate sale processes, prioritising the needs of existing companies in their portfolios and fearing a hit on exit multiples, driven by uncertainty over the prospects of portfolio companies and a lack of appetite on the buy-side.

The slowdown in exits arrices parallel with a reduced number of buyouts, with dealflow declining by 65% year-on-year in Q2, according to Unquote Data. Consequently, secondary buyouts were few and far between as an exit type in Q2, going from 25% of all exits in Q2 2019 to 5.5% in Q2 2020. Trade sales, on the other hand, showed resilience, comprising 55% of all exits, versus 44% in Q2 2019.

Notable Q2 2020 exits

Source: Unquote Data