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Alternative Market Briefing

Nordic-based private capital fund managers provide investors with outsized returns to compensate for the risk

Thursday, August 22, 2019

Laxman Pai, Opalesque Asia:

Although the majority of European capital is concentrated among Western Europe-based managers, Nordic-based fund managers have offered investors the largest return compared with firms in Western Europe and Central & Eastern Europe.

According to Preqin, the associated risk is marginally larger in comparison, though these impressive return figures are the rewards investors would expect as compensation.

Nordic-based managers exhibit a median net internal rate of return (IRR) of 14.3% and the median standard deviation of 12.1%.

At the other end of the spectrum, funds in the less developed Central & Eastern Europe region have produced the lowest median return (+8.2%), but with the lowest associated risk (8.7%).

"The quartile rankings of Nordic-based funds also reflect the success they are enjoying: 36% are ranked as top quartile in their respective benchmark groups, with only 18% in the bottom quartile," said Jaysul Mistry, an analyst at Preqin.

Nordic managers attract over 4 times more private capital

Nordic-based managers have attracted over 4x more private capital than managers in the much larger Central & Eastern Europe, and Nordic-based AUM has increased at a greater rate than both other European regions, Preqin said.

Recent fundraising statistics also reflect the rising investor appetite for Nordic-based funds, and the largest Europe-based fund closed since 2018 was managed by Swedish-based EQT - t......................

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