Finnish companies are attracting more funding, according to the Finnish Venture Capital Association’s preliminary statistics for 2002. Total amount invested was up 12 per cent to €380 million in 2002 and the number of investments grew from 449 to 471.
There was a shift in investment focus towards follow-on rounds. There were 157 initial investments during the year, while follow-on rounds made by Finnish firms were up to 314. In 2001 initial investments (244) still outnumbered follow-on investments (205), although the gap had already started showing signs of closing.
However, the majority of invested capital was still channelled to new portfolio companies – initial investments grew from €221 million to €252 million, which represents 66 per cent of the total amount invested in 2002. This growth is explained by the decrease in larger buyout transactions during the period.
In 2002 fund raising in Finland reached its highest level ever. Total funds raised by the Finnish private equity and venture capital companies amounted to €779 million, almost double the amount raised in 2001. Independent private equity funds accounted for €637 million of the total amount raised, while €134 million was channelled through other investment vehicles.
By the end of 2002, capital under management of the Finnish private equity industry totalled €2,953 million, an increase of 6 per cent compared with 2001.
In spite of a tough environment for exits in 2002 the total amount of divestments at cost remained at the same level as previous years at €115 million from 154 companies.