DENMARK Trends and Developments Contributed by: Dan Moalem, Jakob Skafte-Pedersen, Poul Guo and Thomas Enevoldsen, Moalem Weitemeyer
Final thoughts Private equity activity in Denmark remains subdued. While certain sectors such as technology and infra - structure continue to attract attention, many M&A pro - cesses are being paused, delayed, or not launched at all. This reflects a broader environment of uncertainty, where factors like tariffs, supply chain shifts, and lim - ited access to financing make it difficult for investors to commit to long-term decisions. Continuation vehicles are now a common feature of the market. This shift reflects the current challenges around traditional dealmaking and valuations. Although Denmark offers a stable legal and regula - tory framework, that alone is not enough to offset the structural hesitation among sponsors. Activity is expected to remain selective for the rest of 2025, with investors focusing on specific opportunities rather than broad re-engagement. The overall market con - tinues to adapt, but cautiously.
in benchmark interest rates could ease credit condi - tions and reduce the cost of leveraged finance. This, in turn, may support higher valuation multiples and allow sponsors to reintroduce structured capital. While mar - ket participants continue to act with caution, forward guidance from central banks points to gradual eas - ing – highlighted by the eighth interest rate cut by the ECB on 11 June 2025 – which may improve execution confidence over time. Second, market consolidation is likely to continue driving deal flow. In a period marked by geopoliti - cal tensions, tariff-related uncertainty, and evolving supply chain dynamics, creating larger, more resilient platforms through M&A can help companies manage external volatility. With Denmark’s fragmented corpo - rate landscape, buy-and-build strategies remain an attractive value creation model for sponsors seeking scalability and operational synergies. Third, digital transformation remains a key focus for both portfolio companies and private equity manag - ers. Developments in automation and AI are accel - erating, helping firms reduce cost, improve diligence and streamline reporting. These tools also support navigation of increasingly complex regulatory frame - works, including those introduced by the EU AI Act, which is expected to impact deals involving AI-driven technologies. Fourth, the role of secondary liquidity solutions, par - ticularly continuation vehicles, is expected to remain significant. As traditional exits remain limited, manag - ers are increasingly using these structures to gener - ate liquidity without exiting strong-performing assets. This trend, coupled with the continued presence of high levels of dry powder and maturing fund timelines, reflects a market still adapting to structural constraints in exit activity and risk appetite. As a counter to these forces, the current global mac - roeconomic uncertainty, geopolitical changes and the ongoing risk of increased tariffs affecting trade and trade patterns will expectedly keep activity relatively low and lower than was expected when looking into 2025 in the last quarter of 2024.
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