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The rising tide of capital markets recruitment in the Nordic region

The Nordic region is experiencing a surge in IPOs, activity that is in turn fuelling demand for capital markets and M&A specialists.

Norwegian insurer Gjensidige Forsikring and Danish telecoms operator TDC are both expected to launch $1bn-plus flotations by the middle of this month, while Denmark-based cleaning services firm ISS could be another that comes to the market in the next few weeks.

This activity is tapping into wider growth in the European M&A and buy-out market, with consultancy Ernst & Young calculating that the first nine months of the year have seen a remarkable recovery on 2009.

So far this year, the European buy-out market had seen 371 deals with a combined value of some €30.5bn, against 2009’s total of 432, valued at €18.2bn, which was the lowest recorded since 1995, it said.

According to data provider Dealogic, meanwhile, ECM volumes in the Nordic region stand at $17.1bn for the year to date, the third highest year-to-date figure on record behind 2007 and 2000.

One reason for an increased interest in IPOs within the Nordics specifically has been some reluctance among private equity firms to commit to secondary buy-outs and preferring to go down the IPO route instead, points out David Ramm, partner and Nordic PE leader at Ernst & Young.

“Private equity activity has picked up, with a lot of houses preferring to tap into capital markets’ broader auctioning processes. Nevertheless the traditional channels of selling to PE or trade buy-outs are still the most prevalent,” he says.

Denmark and Sweden have been seeing rising activity levels, with healthcare and retail both looking strong, he adds.

“Inevitably I think we are going to see a big demand for all types of advisers as a result. Generally, Sweden and Norway have ridden the storm well and Finland and Denmark are not far behind,” he says.

Recruiters have also been reporting increased activity, with some banks and financial services companies looking to expand operations, particularly within the ECM arena, with one recruiter arguing IPOs were now very much “on the agenda” within the region.

While in Finland there was less going on on the ECM side, “we are seeing a lot of activity around M&A and advisory,” agrees Erkki Tuominen, managing partner at Finnish recruitment firm CV Group.

“DCM is in demand and bond issuances and syndicated loan renegotiations are doing well, so specialists in those areas are sought after,” he adds.

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