Value creation analysis for private equity funds in Norway 2021

In this analysis, we study the activity of the Norwegian companies owned by PE funds, in the form of value creation and employment. The analysis is based on a data set that combines PE portfolio data for Norwegian enterprises with register data from Menon’s historical database of accounting information for Norwegian companies. The analysis can be summed up in the following main findings:

Value creation: Today’s portfolio companies had a total value creation of NOK 73 billion in 2021.¹ This constitutes 2.6 percent of Norwegian mainland GDP. The value creation of the portfolio companies experienced a moderate reduction in 2021, after three years of significant growth. One explanation for the reduction in activity is the corona pandemic, which hit several portfolio companies also in 2021.

Employment: Norwegian companies owned by private equity employ 86,100 workers, an increase of five thousand since 2020. This figure mainly reflects employment in Norway, but also includes employment through subsidiaries in other countries with headquarters in Norway. Despite demanding times during the pandemic, employment of portfolio companies has growth by 15 percent during the pandemic years of 2020 and 2021.

Growth: The development for the portfolio companies before and after PE ownership shows that the growth rate of portfolio companies is maintained, and in some cases also increases, in the year after PE investment. The growth in early-stage companies is especially strong in the years following investment. The result is a clear sign that PE funds contribute to further development of portfolio companies by supplying capital and competence.