vuosikirja / yearbook 2007 – 2008 - Suomen pääomasijoitusyhdistys ry

INVESTMENTS PATTERNSThe total investment volume in 2006 amountedto 350 (313 million in 2005) million eurosand a total of 454 (423) individual investments.The number of companies financedwas 284 (245).Private investment funds and captive investorsrepresented 86 % of the total investment,while the public sector was responsible for14 %, which was a level typical for Finland.Again, public sector actors invested smallerstakes, often taking the back seat to privatelead investors in syndicated deals. This is reflectedin public sector’s greater share in thenumber of investments. The public sectormade 145 investments, which corresponds to32 % of the total number of investments. Theinvestments made by the public sector weremostly aimed at existing portfolio companiesas well as at follow-on investments.Venture capital investments increased theirrelative share of all investments totalling 248million euros in 2006, which is 71 % of totalinvestments. The remaining 29 % consisted ofbuyout deals, which amounted to 102 millioneuros. The number of venture capital investmentswas 410, while 44 were buyout-relatedtransactions.The financing instruments used in 2006 weresplit in a typical fashion. Equity was usedfor 42 % of the total amount invested, whilemezzanine was used for 28 %. Unsecureddebt was used for 17 % of the total investmentsand quasi-equity for 13 %. Secureddebt was marginally used to a total amountof 600 000 euros.Foreign Private Equity houses invested 171million euros in Finland in 2006. This figureis presented in accordance with EVCA methodologyand is not perfectly comparable withthe figures presented elsewhere in this text.Initial and Follow-on InvestmentsInitial investments are defined here from theperspective of the investing fund. An initialinvestment is defined as the first investmentmade by a fund in a target company. Beyondthe initial investment transaction, the followinginvestments by that fund into the companyare categorized as follow-on investments.In 2006 a total of 185 million euros was investedin the form of initial investments,whereas the number of initial investmentswas 182. Investment activity focused moreon follow-on investments than in previousyears. For the first time, the amount of follow-oninvestments reached the level of initialinvestments. The number of initial investmentsremained at a typical level of 40 % ofall investments.Most initial investments were made in companiesin the phase of expansion totalling 38(40) million, which corresponds to slightlyover one fifth of all initial investments (buyoutsincluded). Early stage 3 companies receiveda total of 99 (65) investments and 33(30) million euros in initial investments withseed, start-up and other early stage companiesreceiving 3 %, 7 % and 6 % of all initialinvestment euros´, respectively.Companies in the seed and start-up phasesreceived the highest number of initial investments,equivalent to 40 individual investments(22 % of the total number of initial investments).Companies in the phase of expansionreceived 27 (15 %) and other early stage companies19 (10 %) initial investments.staticticts233Early stage comprises of seed, start-up and other early stage development stages.