Finnish PE investors' portfolio companies grow faster than comparison group

Finnish PE investors' portfolio companies grow faster than comparison group

The impact study shows that the turnover growth of PE investors' portfolio companies is eight times faster within three years of the first investment than within a comparison group of companies of the same size, operating in the same industries. The ownership period is typically 3 7 years, during which they help companies grow. After this, the PE investor leaves the ownership and the company moves to the next stage of growth, for example by listing on the stock exchange.

PE investors have been involved in the growth of many companies in Finland, in addition to the well-known Wolt, Supercell and Musti and Mirri. More than 600 growth-oriented companies have a PE investor as their owner, and new portfolio companies are constantly being sought, says Jussi Lehtinen, PwC partner who has been responsible for the study.

The number of personnel in PE investors' portfolio companies grows up to 20 times faster than comparison companies. The annual growth measured over a three-year period is 39 compared to 2 in the reference companies. The turnover per employee of the portfolio companies is fourfold more than fourfold compared to the comparison group.

The number of employees has gone up as the company's operations grow, but acquisitions are part of the PE investor's strategy. This group of fast-growing companies would often have a desire to recruit more, but there is a shortage of skilled labor in both startups and growth companies, according to Jonne Kuittinen, who is in charge of research at FVCA.

PE investors invest in companies outside the stock exchange from the funds they collect. The combined turnover of the capital investors' portfolio companies was more than 20 billion euros, which is about five percent of the turnover of all Finnish companies at the end of 2021. At the same time, about 76,000 people worked in portfolio companies in Finland, which is about five percent of the number of people working in all companies in Finland. Around 18,000 people were employed abroad by the portfolio companies of Finnish PE investors.

PE investors invest in Finland's most promising growth companies through private PE funds.

The owner group aiming for bold growth has a significant social impact. FVCA Managing Director Pia Santavirta says that growth may otherwise slow down and productivity development is bland in this kind of market situation.