A recent survey by Tesi (
This is now the second comparison of returns from Finnish VC&PE funds to those from the listed market, and the results still look good: the returns from 75% of the funds of 2009–2020 vintage exceed the returns generated by the listed market. The top quartile of the fund generated returns 2.5 times higher than the listed market.
nCapital calls and capital repaid by funds, as well as unrealised value, were indexed in the survey against the public stock market on the value dates of the events. The OMX Helsinki General Index was used as the benchmark index.
nTop venture capital funds generate high returns
nVenture capital funds investing in startups have excelled: Finnish funds raised after the financial crisis (2009–2015) achieved annual percentage returns of 20%. In terms of their returns, over one-half of these funds are positioned in the top quartile compared to their European peers.
nThe spread of returns from this cohort of funds has contracted compared to earlier surveys: returns from weaker funds have risen.
n“The smaller spread combined with the peak returns derived from the high valuation levels of earlier years can mean that an increasing number of funds have stabilised their returns at a higher level,” comments
Returns from newer venture capital funds (2016–2020 vintage) seem to be modest. Annual percentage returns declined to 11% from the previous year’s 18%. According to Arttu Suominen, Investment Associate at Tesi who compiled the survey, many of these funds are still in the investment phase and have not yet risen in value. The returns of venture capital funds are dependent on the follow-on financing rounds enabled by the favourable development of portfolio companies, of which there were exceptionally few in 2023.
n“The sluggish M&A market also impacts returns, especially those from newer funds, as exits from companies have slowed down,” comments
Higher annual returns from new buyout and growth funds
nThe returns from buyout and growth funds investing in more established growth companies are mainly stable, showing little change in 2023. Annual percentage returns from mature funds (2009–2015) is 16% and from newer funds 13%.
n“An interesting feature is that newer buyout and growth funds boosted their annual percentage returns by two percentage points compared to the previous year. Given the prevailing economic challenges, that’s very positive news,” comments
“Generally speaking, it seems that the portfolio value of Finnish VC&PE funds has hardly fallen at all. Of course, final returns are only received when exits are completed. Nevertheless, it’s possible to make good estimates because valuations comply with international guidelines, so the data is comparable,”
"Finnish VC&PE funds have seen good returns, attracting a widening investor base. For instance, family investment companies allocated a record amount to Finnish VC funds last year. Another significant investor group comprises pension funds, which invest in funds both directly and through funds-of-funds (KRR) managed by Tesi. VC&PE investments have indeed proven to be one of the most lucrative asset classes for pension funds in recent years," comments
"However, there is ample room to expand the investor base: In
About the survey:
nThe survey is extensive and covers, in practice, Finland’s entire VC&PE market. The survey separately examined venture capital funds investing in startups, and buyout and growth funds investing in growth companies on a more established footing. The funds were further divided into two groups based on their initial year of inception (vintage year): mature funds formed between 2009-2015 and new funds formed between 2016-2020. The returns on newer funds were reviewed for the second time in this survey.
nThe survey includes 42 Finnish funds, comprising 22 buyout and growth funds and 20 venture capital funds. The survey included 19 mature funds (vintage 2009–2015) and 23 newer funds (vintage 2016–2020). These funds collectively raised a total of some
The survey of investment returns analyses returns from investments in the Finnish VC&PE market at the end of 2023.
nRead the whole survey here.
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