Private Equity - Iceland | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$416.40m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 4.41% resulting in a projected total amount of US$434.70m by 2025.
The average size per deal in the Private Equity market amounts to US$416.40m in 2024.
From a global comparison perspective it is shown that the highest deal value is reached United States (US$594.00bn in 2024).
In the Private Equity market, the number of deals is expected to amount to 1.74 by 2025.

Definition:

Private equity involves partnerships that buy, manage, and eventually sell companies. These firms manage funds for institutional and accredited investors, who commit significant capital for extended periods. Private equity funds can acquire entire private or public companies or participate in buyouts with other investors, but they typically avoid holding stakes in publicly traded companies. The Private Equity market encompasses a broad range of deal types that involve acquiring equity ownership in private companies. This market typically includes leveraged buyouts (LBOs), growth capital, Carve-outs, and other forms of equity investments that target mature businesses with the potential for operational improvements and value creation. The market presented here does not include Venture Capital investments. While both Private Equity and Venture Capital involve equity stakes in companies, Venture Capital specifically focuses on high-growth potential startups, while private equity firms invest in established companies with the aim of increasing the value of these companies before selling their investment after several years.

Additional information:

The market contains the following KPIs: the deal value, the number of deals, the average deal size as well as the assets under management (AUM). Key players in this market are companies such as Blackstone, The Carlyle Group, KKR, Goldman Sachs, General Atlantic, and Warburg Pincus.

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Leveraged Buyouts (LBOs)
Growth Capital
Carve-Outs
Distressed Buyouts
Secondary Buyouts

Venture Capital
Venture Debt
Traditional bank loans
Digital capital raising

The Private Equity market in Iceland has seen minimal decline, influenced by factors such as cautious investor sentiment, limited capital availability, and the challenges of navigating a small, mature economy, which impacts overall growth potential and investment opportunities.

Customer preferences: The Private Equity market in Iceland is witnessing a notable shift towards sustainable and socially responsible investments, driven by a rising consumer preference for environmentally conscious practices. Investors are increasingly aligning their portfolios with businesses that prioritize sustainability, reflecting the cultural emphasis on preserving Iceland's pristine nature. Additionally, demographic shifts, including a younger, more socially aware population, are fostering demand for innovative startups focused on renewable energy and eco-friendly solutions, shaping the future of investment opportunities in the region.

Trends in the market: In Iceland, the Private Equity market is increasingly gravitating towards sustainable investment strategies, as stakeholders recognize the importance of aligning with global environmental goals. This shift is marked by an influx of capital into ventures focusing on renewable energy and sustainable tourism, mirroring Iceland's commitment to conserving its natural beauty. Furthermore, the younger demographic, with heightened awareness of social responsibility, is driving demand for innovative startups that prioritize eco-friendly practices. These trends are reshaping investment landscapes and fostering collaborations among industry players committed to sustainability, ultimately enhancing brand reputation and market resilience.

Local special circumstances: In Iceland, the Private Equity market is uniquely shaped by its distinct geographical and cultural characteristics, alongside a supportive regulatory environment. The country's abundant natural resources and commitment to renewable energy create fertile ground for investments in green technologies and sustainable practices. Additionally, Iceland's small population fosters close-knit communities, encouraging collaboration among investors and entrepreneurs. The government’s favorable policies towards sustainable ventures further enhance this landscape, attracting capital into eco-conscious projects that resonate with both local values and global sustainability goals.

Underlying macroeconomic factors: The Private Equity market in Iceland is significantly influenced by macroeconomic factors such as interest rates, inflation, and overall economic stability. Central bank policies, particularly adjustments to interest rates, play a crucial role in shaping the cost of capital for investments. Low interest rates generally enhance the appeal of leveraged buyouts and other funding strategies, allowing private equity firms to secure financing at a lower cost. Conversely, rising interest rates can tighten liquidity, making it more challenging for firms to source capital. Additionally, the national economic health, evidenced by GDP growth and unemployment rates, directly impacts investor confidence and the ability of portfolio companies to thrive, further influencing market performance.

Data coverage:

The figures are based on deal value, number of deals, the average size of each deal, and assets under management within the Private Equity market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, and publicly available databases. In addition, we use relevant key market indicators and data from country-specific associations, such as: GDP, total investment (% of GDP), household wealth (per Adult), high income (% of population), and number of high-net-worth individuals (HNWI). This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are total investment (% of GDP), household wealth (per Adult), number of high-income persons, and number of high-net-worth individuals (HNWI).

Additional notes:

The market is updated twice a year in case market dynamics change.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

In the last decades, private equity has emerged as a dominant force in global finance, reshaping industries and driving economic growth worldwide. After the peak experienced in 2021, however, private equity activity slowed down in 2022 and 2023, due to multiple factors such as inflationary headwinds, rising interest rates, geopolitical unrest and general uncertainty. With an estimated value of nearly four trillion dollars, private equity dry capital - a term commonly used in the private equity world to refer to committed, but unallocated capital - reached unprecedented heights in 2023. A high level of this capital means that private equity firms have unspent cash reserves. Among the most influential private equity firms worldwide, the Blackstone Group is the largest in terms of funds raised.