1. 1.
The Swedish Private Equity Market

2. 2.
About SVCA

3. 3.
Business
Angels
Venture
Capitalists
Buyout
firms
Business
Angels
…supporting the interests of….

4. 1.
SVCA’s tasks:
Professional
development
Transfer of
knowledge
Research and
statistics
Ethical guidelines
& valuations
principles
Contacts with
politicians and
policy makers
Information
Conferences and
network

5. 5.
Swedish private equity follows European standard….
 Ethical guidelines based on EVCA’s Code of
Conduct
 International Private Equity & Venture Capital
valuation guidelines (AFIC, BVCA, EVCA)

6. 6.
Working towards
improved conditions for
entrepreneurs and
investors
= new jobs and growth
A main task:

7. 7.
What is private equity?

8. 8.
Definition of private equity
Private Equity
…equity investments in
unlisted companies with
an active ownership
Business Angels
… investments by private
individuals in
companies without a
family connection…
Venture Capital
…equity investments
in seed, start-up- or
expansion phases
Buyout
…investments in more
mature development phases.
Financing through
equity and debt
Public Equity
…listed companies

9. 9.
Cash flow
Time
Different development stages – different investors
Business Angels & Venture Buyout
Expansion
Maturity
Decline
Seed &
Start-up

10. 10.
A significant industry…
Capital under
management
(EUR bn)
Capital
invested
(EUR bn)
Number
of PE
companies
Number
of portfolio
companies
Buyout 31.9 18.4 30 250
Venture Capital 5.8 3.5 90 800
Total 37.7 21.9 120 1050
Source: SVCA member data
…..where the portfolio companies combined turnover constitutes
more than 10% of the Swedish GDP

11. 11.
Swedish Private Equity in an international
perspective
EVCA Yearbook 2008
Private equity investments in % of GDP 2007
By country of portfolio company

12. 12.
Swedish Private Equity in an international
perspective
Private equity investments in % of GDP 2007
By country of private equity firm
EVCA Yearbook 2008

13. 13.
Swedish PE funds financed by international capital
Source: SVCA Q1-Q4 2007
Capital origin
BuyoutVenture

14. 14.
Pension funds and fund of funds dominates
Private equity financing sources
Source: SVCA Q1-Q4 2007
BuyoutVenture

15. 15.
Stage distribution
Number of investments 2007Amount invested 2007
Source: SVCA Q1-Q4 2007

16. 16.
Where do Swedish private equity funds invest?
BuyoutVenture
Number of investments 2007
Source: SVCA Q1-Q4 2007

17. 17.
The Private Equity value chain

18. 18.
Different roles in the value chain…
Public financing
Famliy, friends, fools
Capital needs
Company development
Business Angels
Venture Capital
Buyout Capital
IPO

19. 19.
Business angel and Venture Capital focus…
 Innovative & unique business idea
 Strong entrepreneurial team with industry
experience
 Growth potential & scalability
 Targeting international growth markets
 Potential for high profitability
 Clear exit possibilities

20. 20.
…but Business Angels ...
... also have different investment criteria compared to
venture capitalists…
 Can invest smaller amounts
 Investment decisions more based on intuition and
confidence in the entrepreneur – ”gut feeling”
 Faster investment decisions – business angels are normally
invests their own money
 Often prioritizes local entrepreneurs
 Except return, e.g. contribution to society, fun, stimulating
and support to the region can be important reasons for
business angels to invest

21. 21.
Venture Capital investments
…a few Swedish examples…

22. 22.
Venture Capital firms – how they operate
Appoint/restructure
management team
Appoint professional
Board of Directors
Continuous ”sounding
board”
Active board work
Open doors to
potential customers
and partners
Expansion
Financing
Reporting systems
Investment
process
3-6 months
Value creation
3-5 years
Exit
process
4-6 months

23. 23.
Buyout focus
 Strong market position
 Competent & committed management team
 Profit improvement potential
 Strong cash flow
 Independent of business cycles

24. 24.
Buyout firms – how do they operate?
Board work
Focus on operational
improvements
Focus on core business
Add-on acquisitions
Divestments
Corporate governance
Industrial
restructurings
Expansion
Financing
Reporting systems
Investment
process
4-6 month
Value creation
3-5 years
Exit
process
4-6 months

25. 25.
Buyout investments
…a few Swedish examples

26. 26.
Trends

27. European investments at €73.8 Billion
(Equity only from private equity funds)
8,5
14,4 15,3
12,1
17,9 20,7
26,6
34,4
53,9
61,6
4,1
6,0
10,7
19,7
12,2
9,8
8,4
10,3
12,7
17,3
12,1
5,6
0
10
20
30
40
50
60
70
80
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
€ billion
Venture Capital
Buyout
Source: PEREP_Analytics for 2007 figures
Venture Capital: Seed, Start-up, Expansion, Rescue/Turnaround
Buyout: Buyout, Replacement capital

28. The bigger picture – All private equity
activity flows in Europe (industry statistics)
Source: PEREP_Analytics for 2007;
Thomson Reuters/PwC for previous years;
€ billion

29. 29.
Source: SVCAs quarterly surveys 2004-2008
0
50
100
150
200
250
300
0
5000
10000
15000
20000
25000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2004 2005 2006 2007 2008
Total invested amound Number of investments
Investments 2001-2008, MSEK

30. 30.
Investments 2001-2008, MSEK
Source: SVCA quarterly surveys 2001-2008
6713 6514 5688
12789
35988
39560
43 290
29 820
5042 3072 4000 3814 4399
6395
5552 5196
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2001 2002 2003 2004 2005 2006 2007 2008 Q1-
Q3
Buyout* Venture
The total invested amount within venture and buyout constitutes
94% and 69% respectively compared to the full year 2007

31. 31.
VC focus on start-up and expansion
Early-stage investments 2001-2008, amount (MSEK)
Source: SVCA quarterly surveys 2001-2008
247
93 81 190 114 108 204
64
911
630
1515
1205
1638
1 759 1 784
959
3884
2349 2404 2419
2647
4 528
3 564
4183
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2001 2002 2003 2004 2005 2006 2007 2008 Q1-Q3
Seed Start-up Expansion
Tydlig förskjutning mot expansionsinvesteringar under
de tre första kvartalen 2008.

32. Investments in Swedish portfolio companies
2005-2008
32.
12405
16233
22075
17006
2090
4089 3976
4618
0
5000
10000
15000
20000
25000
2005 2006 2007 2008 Q1-Q3
Buyout* Venture
Positive trend for invested amount into Swedish companies for
the three first quarters 2008 and the amount invested in
Swedish venture companies has already reached all time high.

33. 33.
Medtech , biotech and IT attract most investments
Source: SVCA Q1- Q4 2007
Number of investments

34. 34.
Largest investments within healthcare and service
Invested amount, MEUR
Source: SVCA Q1- Q4 2007

35. 35.
Investments in Cleantech
Cleantech accounted for 9.1 % of all venture
investments into Swedish companies during 2007.
Total invested amount and number of investments since Q1 2006
40
142
24
63
26
92 85
155
205
70
284
6
8
5
9
12
17
11
21
5
14
16
0
5
10
15
20
25
0
50
100
150
200
250
300
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2006 2007 2008
MSEK Number of investments

36. 36.
Exits

37. 37.
Exit alternatives
IPO
Industrial
trade sale
Financial
sale
Write-offBuyback of entrepreneur

38. 38.
Divestments 2001-2007
Received amounts
Source: SVCA quarterly reports 2001-2007

39. 39.
Källa: SVCA kvartalsrapporter Q1-Q4 2007
Divestments 2007
Number of divestments
BuyoutVenture

40. 40.
Belopp Vinstmultipel 1
Venture 755 2,0
Buyout 9 385 5,1
High multiples for exits 2007
1. Encompasses 93% of divested amount
Source: SVCA Q1-Q4 2007

41. 41.
High multiples for exits 2006
1. Encompasses 88% of divested amount
Source: SVCA Q1-Q4 2006
Amount (MEUR) Multiple 1
Venture 782 2,4
Buyout 3 511 2,6

42. 42.
Source: ”Rapporten Utvecklingen för riskkapitalbolagens portföljbolag 2001-2006”
Swedish private equity financed companies
grow faster!

43. 43.
The industry’s messages
Private equity is an industry that...
 … generates good returns for investors
 … creates new jobs
 … generates growth and new companies
 … develops business environment
 … attracts international capital
 … is fun, stimulating and attracts highly
qualified people
 … develops entrepreneurship in Sweden!
… and contributes with capital, active
ownership and long-term value creation