Finnish private equity and venture capital funds deliver returns despite economic headwinds

After a period of difficulty, the total returns of Finnish venture capital funds have turned to growth. The total value to paid-in (TVPI) of mature VC funds (vintage 2009–2015) rose to 2.9x, and that of newer VC funds (vintage 2016–2021) to 1.3x.

"The growth in total returns signals that follow-on funding rounds for portfolio companies have increased. This is a positive sign that portfolio companies have succeeded in raising new financing and are growing," says Tapio Parkkonen, Tesi's Investment Analyst responsible for the survey.

The internal rate of return (IRR), however, remained at the prior year's level of 18% for mature funds, while declining slightly to 6.5% for newer funds. In terms of distributions to paid-in (DPI), Finnish funds have fallen somewhat behind their European peers.

"The more modest development in IRR and DPI may, in addition to the challenging exit market, partly reflect a deliberate choice not to exit strong portfolio companies too early. In a difficult market, the focus has been on company growth and value development. Last year saw several large funding rounds, and the valuation of a number of companies has increased significantly," Parkkonen assesses.

Despite the challenging environment, mature venture capital funds continue to perform well – both against European peers and the listed market. Compared to European peers, over half of Finnish funds still rank in the top return quartile. Despite a strong year for the Helsinki Stock Exchange, the top-quartile venture capital funds still outperform it by 2.5x.

"A certain degree of polarisation is visible: the best funds are performing even better than before, and the gap to the lowest-performing funds has widened," Parkkonen continues.

The returns of newer venture capital funds remain modest for now. The sample is, however, weighted towards newer funds that are still in their investment period, meaning value creation is still at an early stage. The most recent funds, from vintage year 2021, are particularly prominent in the sample.

Stable returns and successful exits from buyout and growth funds

The returns of buyout and growth funds investing in more established growth companies look strong: mature Finnish buyout and growth funds (vintage 2009–2015) are almost fully realised, with an IRR of 16% and a TVPI of 1.8x.

The total returns of buyout and growth funds have remained stable, and exits have been carried out at a steady pace despite a challenging M&A market. The portfolio companies of Finnish funds are typically smaller than those of European peers, which may have facilitated exits. Secondary buyouts have grown in popularity as an exit channel.

Newer buyout and growth funds (vintage 2016–2021) continue their positive development despite the difficult market conditions. Relative to the European peer group, performance has been favourable in terms of total returns (TVPI) and distributions to paid-in, with a growing share of funds ranking in the top return quartiles.

In the IRR comparison, however, the lower return quartiles are overrepresented. This indicates that European peers have managed to generate returns more efficiently than Finnish buyout and growth funds – that is, within a shorter timeframe.

"Finnish buyout and growth investors primarily invest in domestic companies, and for example when the construction sector and consumer demand are under pressure, the return development of funds with exposure to these sectors has at least slowed," comments Samuel Wendelin, Tesi's Director of Fund Investments.

"Generally speaking, Finland's growth company landscape is attractive, and this is reflected positively in the returns of domestic funds. Going forward, the success of Finnish companies will be strongly influenced by their ability to leverage artificial intelligence in growing their business. Private equity investors who can support their portfolio companies through this transformation are well-positioned right now," Wendelin concludes.

Read the whole survey.

About the survey:

Fund capital calls, distributions, and residual values were benchmarked against the listed market, indexed on the relevant value dates. The benchmark indices used were the Helsinki Stock Exchange's OMXHGI total return index, the STOXX® Europe 600 Technology index, and the OMX NORDIC Small Cap index.

The survey is comprehensive and covers nearly all Finnish private equity and venture capital funds. It examines venture capital funds investing in startups and buyout and growth funds investing in more established growth companies separately. Both groups were further divided into two vintage cohorts: funds with an inception year between 2009 and 2015, and those with an inception year between 2016 and 2021. The returns of the newer funds are examined here for the fourth time. The figures in this survey are not fully comparable to those from previous years, as vintage 2021 funds have been included for the first time.

The survey covers 53 Finnish funds, of which 28 are buyout and growth funds and 25 are venture capital funds. Of these, 19 are mature funds (vintage 2009–2015) and 34 are newer funds (vintage 2016–2021). Total capital raised across all funds amounts to approximately EUR 5.3 billion.

The survey of investment returns analyses returns from the Finnish venture capital and private equity market as at the end of 2025.