Nordic alliance pitches one Nordic market and a growth fund to keep IPOs at home

One market, not one exchange

Nordic Compass - a coalition of around 40 companies, investors and institutions - argues the Nordics should knit together their capital markets so investors and issuers experience them as one. Christian Clausen, who leads the alliance's capital-markets work and serves as BlackRock's chair in the Nordics, said the blueprint centers on harmonized rules and linking trading, clearing, settlement and custody across the region.

The current proposal does not call for a single stock exchange under one legal entity, an option the group previously explored. As Clausen put it, the Nordics are perceived "as a number of smaller markets," which limits visibility. He said an integrated market would rank among Europe's three largest exchanges, bringing more attention, faster activity, and strengthening price formation while ultimately cutting the cost of capital.

Who is involved and what they expect

The package will be presented at the alliance's first summit in Gothenburg on Thursday. Taking cues from Mario Draghi's competitiveness study, the initiative targets domestic bottlenecks across four pillars: the capital markets, deep technology, defense, and the energy sector. The roster features EQT AB, Nordea Bank Abp and the Novo Nordisk Foundation, and the capital-markets stream includes Nasdaq Inc., Euronext NV and Euroclear Holding SA.

Nasdaq - which runs the exchanges in Sweden, Denmark, Finland and Iceland - argued that tighter integration would help retain the biggest startups within the Nordic region and encourage pension funds to treat the area as their home market rather than individual countries. "The bigger and the more well-functioning our market is, and the more assets that follow the region, the easier it will be for even the large unicorns and potentially also decacorns to raise capital in the Nordics," said Nikolaj Kosakewitsch, Nasdaq's president of European markets services.

The alliance says investors such as Nordic pension funds and state wealth vehicles oversee almost $4 trillion, with annual inflows of more than $175 billion. Yet channeling enough funding to fast-growing companies remains a challenge, as shown by Spotify Technology SA listing in the US, alongside Klarna Group Plc, and by Oura Inc. weighing a flotation in that market.

The way investors gather insight evolves with new tools and shared markets. We're hosting our first ever investor livestream on 11/17 to show you how to use ChatGPT and Claude to invest like a pro, hosted by Briefs Finance CEO Jaspreet Singh. Save your seat.

Funding the gap and the practical hurdles

To address a nearer-term financing gap, Nordic Compass is pursuing a regional growth and scale-up fund. Clausen said the group has identified about 500 companies that will need roughly €35 billion over the next five years. He estimates €5 billion to €10 billion could come from existing Nordic investors and €10 billion to €15 billion from international investors, leaving about €10 billion unfunded.

When the summit concludes, the alliance aims to gather roughly six to eight prospective investors with additional market participants to hash out the vehicle's framework - addressing its dimensions, governance team, and legal home. Clausen said prospective supporters could range from high-net-worth people and family offices to institutional investors and asset-management firms.

There are headwinds. "We have to be brutally honest," said Frank Vang-Jensen, Nordea's chief executive officer. "The Nordic capital markets don't work." He added that to attract and keep IPOs that now go to the US, the region needs "bigger markets with more liquidity and more depth."

Politics and law are likely to complicate streamlining. Competition between Nasdaq and Euronext for where companies list and for trading activity persists across the region, while national rules, tax regimes and post-trade setups vary - shifts that would need to be made country by country. Notably, some big Nordic lenders - among them Danske Bank A/S and Swedbank AB - have not joined the alliance. Clausen noted that rollout may proceed step by step, with rules and market infrastructure brought into line by supervisors and industry players, and he cautioned it will take time for everyone to "think Nordic instead of local."

What this could mean for your portfolio

If this comes together, the Nordics would trade more like one market, a setup designed to keep large listings and growth equity closer to home while pulling in more global money. The bottom line: more scale could mean better liquidity and price discovery, and the fund targets a roughly €10 billion gap after tapping €15 billion to €25 billion from Nordic and international investors. The alliance's timeline starts with Thursday's summit, then moves to recruiting a core group to hammer out the fund's design - milestones to watch if you track Nordic IPO flow and late-stage financing.

Smart investors look for reliable approaches that make decisions clearer and simpler. On 11/17, our CEO Jaspreet Singh goes live for our first ever investor livestream on how to use ChatGPT and Claude to invest like a pro. Register to join him.