The Nordic region has long been a key part of the investment strategy for Cinven funds. Pontus Pettersson explains why

Is biggest always best? Not necessarily. The five nations that make up the Nordic region – Sweden, Norway, Denmark, Finland and Iceland – have a total population of just over 28 million, roughly the same as Australia, but a combined gross domestic product (GDP) in excess of $1.6 trillion. If the region were a single country, it would be the 11th-largest economy in the world after Brazil, which has a population of 212 million. That significant outperformance makes it an attractive investment opportunity.

But with nearly two decades of successful investments in the region, we know there’s more to successful investing than a high GDP per capita. Here are five things we’ve learnt.  

1. Partnering for regional expertise
Over more than two decades, the Nordics has been a top-performing region for us, and our funds have invested more than €2 billion in market leaders. Companies Cinven have helped grow include Phadia, the worldwide diagnostics testing business, held by Cinven funds between 2006 and 2011, and in Ahlsell, the distributor of building materials, held by Cinven funds between 2006 and 2012.

We also have a specialist Nordic team based in Europe that time and again has helped businesses accelerate growth and reach the next stage of their journey.

2. Global ambitions
Small domestic markets mean Nordic companies must sell beyond their own borders to reach critical mass. This has made them more international in outlook than many of their peers in France, Germany or Italy. As a result, their products or services tend to be already known abroad, making further international expansion easier.

Envirotainer is a great example. In 2018, when Cinven funds invested in the Stockholm-based provider of temperature-controlled containers for drugs in transit, it had zero clients in Sweden; its sales focus was international. With Cinven’s help, it almost doubled its research and development spend from 2017 to 2021, resulting in the launch of a new industry-leading container called RelEye. International growth accelerated, with volume growth tripling in India, Korea and China thanks to investments in new infrastructure, helping to make Envirotainer a global market leader.

We supported a similar global expansion with Phadia; with leading European online services provider group.one, held by Cinven funds since 2023; and with Vitamin Well, the health-conscious food and energy beverage business, held by Cinven funds since 2024.

3. The language of business
The small size of Nordic populations means relatively few people speak their languages, but English – the international language of business – is widely spoken well, helping with global expansion.

4. Business-friendly conditions
Structural factors specific to the region include:
– Some of the most liquid and active equity markets in Europe, with many domestic and international players, including Cinven. This is vital for successfully realising investments at the appropriate time.
– Some of the fastest-growing economies in Europe – this year Sweden is projected to grow by 1.4%, Finland by 0.9%, Norway by 1.5% and Denmark by 2.7%.*
– Low energy costs – often significant for business.
– An entrepreneurial culture thanks to well-resourced welfare systems and business-friendly frameworks that have helped encourage risk-taking.
– A well-educated and skilled workforce, particularly in science, technology, engineering and mathematics.

5. Start-up heaven
The region boasts one of the most active and successful start-up ecosystems in Europe – Stockholm alone had seven unicorns by 2023, more than any city outside Silicon Valley. Within Cinven funds, Vitamin Well is one of those unicorns, which we are helping to grow internationally. In the US, sales volumes have more than doubled since Cinven invested in the business, and in Europe, the business is capturing significant market share across a number of countries.
So while big might grab more attention and more headlines, it is not necessarily always the best. The Nordic region is smaller. But both individually and together, the Nordic countries command an impressive place in the world when it comes to value creation and enriching the economic environment across the region.

*Numbers as of publication date.