Goldman, Carnegie Beat Back Rival Banks Amid Nordic IPO Boom

(Bloomberg) -- A record number of initial public offerings in the Nordic region is benefiting some banks more than others.

Among non-Nordic banks, no one's doing better than Goldman Sachs Group Inc., according to data compiled by Bloomberg on firms advising on the region's IPOs. Morgan Stanley tops the rankings, when all equity sales are taken into account.

But when it comes to Nordic institutions, Carnegie Investment Bank AB stands out as the busiest so far in 2017, followed by Danske Bank A/S.

It's a lucrative time to be advising on Nordic IPOs. Tony Elofsson, head of equity capital markets at Carnegie in Stockholm, says there's “a lot of cash available for equity investments, but in particular IPO investments.” He says the demand is palpable “across sectors.”

Carnegie, a Swedish investment bank that traces its roots back to 1803, this year managed to overtake the biggest Nordic financial conglomerate, Nordea Bank AB, as the top arranger of equity sales in the region. The shift in rankings coincides with the busiest Nordic IPO year on record, according to data compiled by Bloomberg.

Read more: Nordic Listings on Path to New Record Year Amid Swedish IPO Boom

“It has been a strong market for a couple of years now and people have been taking advantage of that,” said Michael Zeier, co-head of Nordea's global corporate and investment banking function. “Company owners and sponsors have, in many cases, brought forward their planned IPOs because the equity market has been very strong.”

While the number of IPOs is higher this year -- 88 through September compared with 64 a year earlier -- the value of those listings, overall, is down about 20 percent. That's mostly because Dong Energy A/S and Nets A/S skew the comparison, after raising a combined $5 billion last year.

Over the past 12 months, small deals have done well since “they provide diversification and supply in a market where there is excess demand for new deals,” Zeier said by phone on Tuesday. What's more, “growth is currently an investor focus and smaller companies tend to have more attractive growth prospects,” he said.

Share sales in the Nordic region are bucking a global trend. The number of deals peaked in 2015 in major economies including the U.S. and China, though values keep rising. Private equity in particular is benefiting from the conditions that favor exits, Elofsson at Carnegie said.

Carnegie was involved in Angry Birds mobile game maker Rovio Entertainment Oyj's September IPO, as well as online retailer Boozt AB's May share sale. It also helped manage (together with Nordea) the biggest offering in the region this year, when Munters Group AB raised about 4 billion kronor ($495 million) in April. Terveystalo Oyj is on track to break that record with an IPO of 876 million euros ($1.03 billion), where the public offering may end earliest on Thursday.

But neither bank was chosen to help arrange the pending IPO of Nykredit Realkredit A/S, which is likely to be the biggest first-time share sale of a Nordic bank in more than two decades.

Read more: Nykredit picks Morgan Stanley, JPMorgan and Danske Bank for IPO

For Nordea, which last month announced its decision to move to Helsinki from Stockholm, the loss of its IPO domination coincides with a series of surveys indicating customer dissatisfaction. The bank came last in a Svenskt Kvalitetsindex customer satisfaction poll among both retail and business clients, published on Monday.

But Zeier says Nordea is still “seeing quite a lot of deal activity.” The bank has “a healthy pipeline of midcap transactions, some of which are dual-track processes, where the IPO could be an attractive exit route if the markets stay strong,” he said.

--With assistance from Niklas Magnusson

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net.

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Jonas Bergman