Private Equity 2025

DENMARK Law and Practice Contributed by: Dan Moalem, Jakob Skafte-Pedersen, Poul Guo and Thomas Enevoldsen, Moalem Weitemeyer

AIFMD The revised AIFMD regime (often referred to as AIFMD II) entered into force domestically in June 2025 and introduced more detailed requirements for expense transparency, liquidity management tools and delega - tion oversight. Managers operating under the Danish Alternative Investment Fund Manager Act must reg - ister with the Danish Financial Supervisory Authority ( Finanstilsynet ) and comply with reporting require - ments. Fund structures are typically established as Danish Kommanditselskaber (K/S), which provide tax transparency and flexibility in profit allocation. 3. Regulatory Framework 3.1 Primary Regulators and Regulatory Issues Merger Control and Competition Law The Danish Competition and Consumer Authority (DCCA) is the primary regulator for merger control in Denmark. Notifiable transactions must be cleared before closing if certain turnover thresholds are met. Private equity-backed transactions are treated simi - larly to corporate deals, although funds with multiple portfolio companies must assess whether control or influence exists across investments when calculating turnover. Transactions that trigger EU thresholds fall under the exclusive jurisdiction of the European Com - mission. FDI Screening Regime Denmark’s Foreign Direct Investment (FDI) regime has become a standard consideration in private equity deals. Administered by the Danish Business Author - ity, the regime applies to both mandatory and volun - tary filings, depending on the sector. Private equity investors acquiring control in critical sectors, such as defence, IT security, or infrastructure, must obtain prior approval. While the regime formally applies to all non-Danish investors, scrutiny may be heightened where sovereign wealth funds or state-affiliated co- investors are involved. In such cases, transparency of fund structure and governance is key. In addition to mandatory filings, the Danish FDI regime provides the Danish Business Authority with so-called call-in powers, allowing it to review and potentially block or impose conditions on foreign investments in

and security sector, including cybersecurity, critical infrastructure, and dual-use technologies, reflecting broader geopolitical developments and increased defence spending in Europe. Macroeconomic and Geopolitical Influences Geopolitical tensions, inflation, and supply chain disruptions have affected private equity activity in Denmark. Tariffs and changing global supply chains remain major uncertainties that complicate long-term investment planning. Although interest rates have stabilised during the first half of 2025, financing costs remain elevated com - pared to pre-2022 levels. This has led to more trans - actions being funded with equity or modest leverage. Deal Structuring and Process Trends In the current environment, seller financing, deferred payments and earn-outs are increasingly used to bridge valuation gaps. Competitive auction processes have become less common, with a shift towards bilat - eral and proprietary deals due to market uncertainty and more cautious buyer behaviour. Further, transac - tions starting as auction processes have in increased number ending as bilateral processes (or paused). 2. Private Equity Developments 2.1 Impact of Legal Developments on Funds and Transactions ESG and Sustainability Reporting Requirements Danish private equity portfolio companies are increas - ingly subject to regulatory requirements concerning sustainability and ESG disclosures. The adoption of the Corporate Sustainability Reporting Directive (CSRD) has had a notable impact on companies that meet the relevant EU thresholds, particularly larger or listed entities. As a result, ESG compliance and readiness have become important areas of focus in both due diligence and post-acquisition planning. This is also a focus of Danish pension funds, who have traditionally been large investors in private equity in Denmark.

145 CHAMBERS.COM