This chapter provides a comprehensive mapping of the Swedish equity markets, both public and private. It presents data on the characteristics of listed companies and the main trends in the use of equity financing. It also offers a broader overview of the Swedish corporate sector and describes the investor ecosystem and ownership structure.
The Swedish Equity Market
Institutional Framework and Trends
Abstract
At the end of 2024, there were 953 listed companies on the Swedish equity market, with a total market capitalisation of nearly USD 1 trillion. Among European peer countries, Sweden has the largest number of listed companies after the United Kingdom. Total market capitalisation represents 159% of GDP, which is significantly higher than major economies such as France (102%), the United Kingdom (88%), the Netherlands (81%) and Germany (50%) (Figure 2.1).
Note: The number of companies listed on MTFs in the EU excluding Sweden is an estimate and should be considered a lower bound. For exchanges where LSEG data do not distinguish between market segments, all listed companies have been classified under the regulated market segment. MTF-listed companies include those listed on dedicated SME and growth-stage segments.
Source: OECD Capital Market Series dataset, LSEG and Bloomberg, see Annex for details; IMF.
The market comprises three main trading venues: Nasdaq Stockholm, Nordic Growth Market and Spotlight Stock Market. Nasdaq Stockholm, which is part of the Nasdaq group, serves as Sweden’s primary exchange and is the largest in the Nordic region. It dominates the Swedish equity market with 724 listed companies representing over 99% of the country’s total market capitalisation. Nasdaq Stockholm has a three-tier structure. The first tier is the main regulated market, which hosts 346 listed companies with a total market capitalisation of USD 942 billion. The First North Growth Market (“First North” hereafter), a multilateral trading facility (MTF), has two sub-segments: the premier market and the general market. Being an MTF, First North applies a different, less rigorous, set of rules for companies compared to the main market. However, the premier segment of First North is designed to increase the visibility of companies to investors and to help them prepare for a main market listing and therefore applies more stringent listing requirements. Since the launch of Nasdaq First North, more than 130 companies have successfully moved to the main market, with many using the premier segment as a stepping stone (Nasdaq, 2023[1]).
The two other markets, Nordic Growth Market (NGM) and Spotlight Stock Market, primarily focus on smaller, growth-oriented companies. NGM, a subsidiary of German Börse Stuttgart, operates a regulated market called Main Regulated, which currently lists ten companies, and an MTF, NGM Nordic SME, with 82 listed companies. NGM’s total market capitalisation amounts to USD 1.7 billion. Spotlight Stock Market operates as an MTF and has 137 listed companies with a total market capitalisation of USD 1.7 billion.
Source: OECD Capital Market Series dataset, LSEG and Bloomberg, see Annex for details.
In terms of market capitalisation, the regulated Swedish equity markets are dominated by companies in the industrial and financial sectors, together representing over half of total value. The composition is, however, very different on the MTFs, where technology and healthcare companies – particularly pharmaceutical firms, which make up nearly half of this sector’s market capitalisation – together account for more than half of both total market capitalisation and number of listed companies, suggesting these markets help provide financing to higher-risk, innovative ventures (Figure 2.3).
Source: OECD Capital Market Series dataset, LSEG and Bloomberg, see Annex for details.
2.1.1. Market performance
From an investor perspective, the Swedish market has been one of the best performing equity markets in the world historically. Since the early 2000s, the SIX Return Index (SIXRX), which tracks the performance of all listed companies on Nasdaq Stockholm, has consistently outperformed the total returns (accounting for both price changes and dividends) of major indices such as the S&P 500 in the United States and the STOXX 600 in Europe. Since 2002, this holds both in domestic currency (SEK) and USD terms (Figure 2.4, Panel A). This has naturally been an important factor in enhancing investor confidence and general interest in the market, attracting further investment and potentially reinforcing returns, creating a virtuous cycle.
The strong performance of the Swedish market is also reflected in its representation in international indices, notably in a European context. As shown in Panel B below, Swedish companies’ weight in the MSCI Europe index (nearly 6%) is almost twice what its share in the constituent countries’ aggregate GDP would suggest (less than 3%). It is also slightly overrepresented in OMXN40, which includes the 40 most traded companies in the Nordic region. In the MSCI World index, however, Sweden is in fact underweighted relative to its GDP share (Panel B). This is largely due to the heavy overrepresentation of the United States, which represents over 70% of the index. Only two other countries are overrepresented relative to GDP (Denmark and Switzerland).
Widespread inclusion in international indices is key to attracting a broad pool of investors, increasing the visibility of companies and markets. This is particularly important when it comes to institutional investors, which without exception have significantly larger ownership stakes in index-included companies compared to non-index companies across the world (Medina, de la Cruz and Tang, 2022[2]). The continued growth of passive, index-tracking investment strategies has intensified these dynamics.
Note: In Panel A, index returns are in USD terms, unless otherwise stated, and include dividends. Data as of February 2025. In Panel B, GDP shares are calculated using information as of end 2024. Weighs in the indices are as of November 2024 for MSCI Europe and MSCI World and as of March 2025 for OMXN40. Country classification is based on country of listing. The number of firms in each index are (in order of appearance from left to right): 40, 415, 1 398.
Source: OECD Capital Market Series dataset, LSEG, MSCI, Bloomberg; see Annex for details; IMF.
2.1.2. Listings and initial public offerings
Most advanced economies around the world have seen their pool of publicly listed companies shrink over time, as delistings consistently outpace new listings. Sweden is an exception to this trend, having had positive net listings (new listings minus delistings) in the past decade. Since 2014, 1 059 companies have listed on the Swedish market, compared to 537 delistings, resulting in a net increase of 522 companies (Figure 2.5, Panels A and B). In 2021, a record year, more than 150 companies joined both regulated markets and MTFs in Sweden. By comparison, the EU excluding Sweden has seen net delistings in almost every year between 2014 and 2024, for a total net loss of 773 companies (Panel C). The positive listing trend in Sweden is widespread and applies to almost all market segments, although most activity has taken place on Nasdaq Stockholm. From 2014-24, 229 companies have listed on Nasdaq’s regulated segment, compared to 117 delistings. First North has had more than 500 new listings, compared to around 200 delistings. However, net listings on First North turned negative in both 2023 and 2024, for a net loss of 40 companies, and 59 on all MTFs.
Note: NGM = Nordic Growth Market. Panel C refers to all markets (regulated and MTFs). EU-wide data are collected from ORBIS (before 2020) and LSEG (thereafter); country classifications for these data refer to corporate headquarters.
Source: Nasdaq Stockholm/First North; Nordic Growth Market; Spotlight; OECD Capital Market Series dataset, LSEG, ORBIS.
A notable feature of the Swedish markets is the widespread use of public equity financing by smaller companies. Between 2000 and 2024, the median initial public offering (IPO) size was just USD 8 million, the smallest among peer countries, around a third of the size in the United Kingdom and France, and well below the EU median of USD 20 million. This primarily reflects strong activity on Swedish growth markets (Figure 2.6, Panel B).
Note: In Panel B, amounts (capital raised and median size) are expressed in 2024 USD millions. The rightmost column shows the share of non-financial IPOs in total IPO proceeds.
Source: OECD Capital Market Series dataset, LSEG, Bloomberg, FactSet, see Annex for details; IMF.
Non-financial companies have been the main drivers of Swedish IPO activity, representing 90% of total proceeds raised in the 2000-24 period. This share is significantly higher than in Denmark, the Netherlands and the United Kingdom, where non-financial companies contribute around 70% of total proceeds (Figure 2.7, Panel A).
Among non-financial companies, the consumer cyclicals sector leads in capital raised, accounting for 36% of total proceeds between 2000 and 2024. The technology sector follows with a share of 15%, although this is largely driven by Telia’s SEK 76.6 billion IPO in 2000. Other key industries include industrials representing 15% of total proceeds and healthcare with a share of 14%.
Technology company IPOs have seen particularly strong growth over time in Sweden. Their share in total IPOs has risen from just 5% in 2008-15 to almost a quarter in 2016-24. The corresponding reduction has primarily been in consumer cyclical companies, which have fallen from more than half of proceeds in 2008-15 to around one-third in recent years (Figure 2.7, Panel B). This trend contrasts with that of the EU, where the overall share of IPOs from technology companies between 2000 and 2024 was higher than in Sweden but has remained largely stable at around 16% during both periods (2008-15 and 2016-24).
Source: OECD Capital Market Series dataset, LSEG, Bloomberg, FactSet, see Annex for details.
The Swedish markets have attracted a number of foreign listings in recent years. At the end of 2024, a total of 30 non-Swedish companies were listed on Nasdaq Stockholm and Spotlight, with an average market capitalisation of USD 124 million (Figure 2.8, Panel A). Most of these were Danish (13), Maltese (5), Swiss (3), Finnish (3) and British (2). Notably, more than three-quarters of these companies are listed on the Swedish MTF markets. Conversely, it is relatively rare for Swedish companies to list on foreign stock exchanges. A total of ten Swedish-domiciled companies were listed abroad at the end of 2024, of which six in the United States, four of which on a US main market (Panel B). These are large, globally active companies with an average market capitalisation of USD 3 billion.
Source: OECD Capital Market Series dataset, LSEG, Bloomberg, Factset, see Annex for details.
As in all EU member states, listed companies and IPOs in Sweden are predominantly regulated by EU law, including the Listing Directive, the Transparency Directive, MiFID II, the Prospectus Regulation and the Market Abuse Regulation. However, there are important design aspects of the applicable domestic regulation of listed companies and IPOs in Sweden that may have contributed to the high levels of activity on local equity markets.
First, in areas where EU regulation leaves flexibility for member states regarding implementation and supervision, Sweden has generally not chosen to implement less stringent rules for listings and listed companies, focusing instead on strengthening investor protection. For example, Sweden has one of the lowest nationally decided thresholds for when a prospectus is required in a security offering, of EUR 2.5 million, compared to a range between EUR 5 to 8 million, the maximum allowed in the Prospectus Regulation, common in most other member states (ESMA, 2023[3]). Furthermore, in many areas national law offers significantly stronger investor protection than what is required both by EU law and in other markets. This notably includes strong shareholder rights. Shareholders in Sweden will almost always have the right to decide, through the general shareholder meeting, on company matters and overrule the board of directors. Pre-emptive rights are strong, shareholders have the exclusive right to decide on director pay and ultimately a right to, at any time and for any reason, call for an extraordinary general shareholder meeting and replace the board of directors. Previous studies have suggested Sweden has among the lowest measurable agency costs in international comparisons (Nenova, 2003[4]).
Second, and of particular interest given the important role of MTFs in Sweden (see section 2.1.6), many areas of the Swedish regulatory framework apply equally to companies listed on regulated markets and MTFs. This includes many areas where EU law only applies to companies on a regulated market, but where the scope of application also extends to MTFs in Sweden, such as the regulation on takeovers (implementing the Takeover Directive), rules on related party transactions and share issuance, as well as say on pay (implementing the Shareholder Rights Directive). Reporting standards are also largely aligned between venues, although there are some differences in accounting framework requirements. For example, on First North, only companies listed on the Premier segment are required to report using International Financial Reporting Standards (IFRS), the standard applicable to all companies on the main market. The remaining companies on First North can use local accounting standards (Nasdaq, n.d.[5]). Similarly, companies listed on the Nordic SME market are allowed to use accounting frameworks other than IFRS, such as the K‑3 rules, a Swedish accounting standard mandated for companies exceeding certain size thresholds (Nordic Growth Market, 2024[6]). The same applies to companies listed on Spotlight Stock Market (Spotlight Stock Market, 2023[7]) .
Third, the broader structure of the Swedish regulatory system for equity markets has some unique features. While the legislator has established a strong foundation of investor protection in the Companies Act, mainly consisting of general rules concerning the competence of the general shareholder meeting, including its control of the board of directors and management and the protection of minority shareholders, detailed rules are not laid down in the Companies Act or other in legislation. Instead, these rules are provided by self-regulatory bodies established by key market actors in co-operation with the public legislator. These self-regulatory bodies include the Swedish Stock Market Regulation Committee, which has the mandate to issue any rules concerning listed companies deemed necessary to protect market integrity (currently including the Swedish Takeover Code, rules on directed share issuances and rules concerning director and management remuneration); the Swedish Corporate Governance Board, which issues and monitors adherence to the Swedish Corporate Governance Code; and the Swedish Securities Council, which interprets and grants exemptions to the rules issued by the Stock Market Regulation Committee and Swedish Corporate Governance Board. The Securities Council can also rule on any other matter pertaining to a Swedish listed company not covered by other rules, which gives the market access to a rapid and cost-efficient dispute resolution system that can adapt to new market developments and innovations. In addition, access to the Securities Council means that court trials concerning disputes relating to, for example, takeovers, mergers, governance disputes or shareholder rights actions very rarely occur.
It should be emphasised that while the regulation referred to as “self-regulation” is issued by non-governmental entities, there are legal mechanisms and competence delegations in place that give the bodies within the self-regulatory system statutory mandates. For example, the rules and the rulings by the Securities Council are binding for listed companies, and breaches can be sanctioned.
2.1.3. Secondary public offerings
Secondary public offerings (SPOs) allow already listed companies to raise additional equity when needed. The possibility of doing so is a key benefit of being a listed company, enabling companies to weather temporary downturns while meeting their obligations to employees, creditors and suppliers. SPOs have played a particularly important role during recent times of financial stress. In 2010, in the aftermath of the global financial crisis, when bank lending contracted, non-financial companies in Sweden raised a record USD 12 billion in new equity through public equity markets. The same dynamics occurred during the COVID-19 pandemic, with non-financial companies raising USD 12.5 billion through SPOs in 2020 and a further record USD 16.6 billion in 2021 (Figure 2.9, Panel A). The growth in SPOs is not, however, just an effect of post-crisis issuance. Globally, total amounts issued through SPOs have trended upwards in the last three decades.
The number of SPOs has also increased, from an average of 33, amounting to USD 4.8 billion per year in the period from 2000-08 to 195 SPOs and USD 7.6 billion since 2009 (Figure 2.9, Panel A). On aggregate, Swedish companies made 3 416 SPOs between 2000 and 2024, the second highest number among peer countries, surpassed only by the United Kingdom. This represents almost one-third of the 10 983 SPOs carried out in EU on aggregate. In terms of capital raised, however, it represents only 8% of total EU figures, owing to widespread use of SPOs by smaller companies in Sweden. Relative to its economy, Sweden has the highest SPO activity among peer countries, reaching 1% of GDP, more than twice the EU average. This activity is primarily driven by non-financial companies, which account for 79% of total SPO proceeds since 2000, 14 percentage points more than in the EU aggregate (Panel B).
Note: In Panel B, capital raised is expressed in 2024 USD millions. The rightmost column shows the share of non-financial SPOs in total SPO proceeds.
Source: OECD Capital Market Series dataset, LSEG, Bloomberg, FactSet, see Annex for details; IMF.
An SPO can provide pre-emptive rights to existing shareholders, giving them the option to buy newly issued shares before other investors. In Sweden, the basic rules governing this process, along with SPO issuance more broadly, are laid out in the Swedish Companies Act. The law takes a rather stringent approach to directed share issues. These are only allowed when the divergence from the shareholders’ pre-emptive rights is justified by the business’ commercial interests and approved by the general shareholder meeting with a two-thirds majority of the share capital – not only votes (the use of dual class shares is widespread in Sweden, see section 2.4). This gives single-vote shareholders significant influence in companies with dual class share structures. Additionally, if the individuals entitled to subscribe to the shares include key decision-makers, such as board members or the managing director, along with their close relatives and entities they influence, a nine-tenths majority of both shares and votes is required. Complementing the legal requirements, the Swedish Stock Market Regulation Committee has issued additional and more detailed rules concerning directed share issuances, which in turn are interpreted by the Swedish Securities Council.
This regulatory model, where statutory principles are built upon and supplemented through self-regulation, allows the Securities Council to review and approve (or reject) more complex structures, where there may be doubts about the compliance with fundamental company law principles, before they are executed. This allows for a great deal of flexibility in terms of transaction structures, which may help explain the very high frequence of smaller SPOs in Sweden.
2.1.4. Market liquidity
The level of secondary market liquidity is an important determinant of the efficiency and functioning of a public equity market. A liquid market also promotes efficient price formation and reduces price volatility. A lack of liquidity therefore leads to higher transaction costs, in turn raising companies’ cost of capital. Low levels of liquidity can also serve to undermine investor confidence and may discourage market participation, by restricting investors’ ability to exit their investment at a time of their choosing at a price that aligns with those publicly available. Liquid markets tend to create a virtuous cycle, with empirical studies indicating that increased liquidity in secondary markets encourages companies to list and issue additional equity, thereby contributing to the further development of the public equity market (Hanselaar, Stulz and van Dijk, 2019[8]).
Measured by the turnover ratio (total traded value over total market capitalisation) on public equity markets, liquidity has been on a declining trend on the main Swedish exchange in the past decade. On Nasdaq Stockholm, the ratio fell from over 60% in 2014 to 41% in 2024. Based on international stock exchange data, this ranks Sweden in the middle among peer countries. The MTF segment First North has seen similar developments, with turnover falling from over 60% in 2020 to just over 30% in 2024 (Figure 2.10, Panels A and B). Amid this decline in liquidity, Nasdaq has implemented an auction model for shares listed on the First North Growth Market, which came into effect in January 2024. Under this model, shares with a bid-ask spread exceeding 7% on average for two consecutive quarters must either hire a liquidity provider or adopt a trading system with five daily auctions. This initiative aims to protect investors, particularly retail investors, from the high price volatility associated with less liquid stocks, which can weaken market confidence (Nasdaq, 2023[9]).
Note: Turnover is calculated as the ratio of traded value to total market capitalisation.
Source: Euronext; LSE; Nasdaq Stockholm; Nasdaq Copenhagen.
It is important to note, however, that a decline in the turnover ratio on public markets does not necessarily imply a reduction in overall trading activity. Recent years have seen an increase in fragmentation in trading, driven by technological advances and regulatory changes, with trades commonly spread across several venues rather than being concentrated on a single exchange. For example, a significant amount of trading now takes place in off-exchange dark pools (Hagströmer, 2022[10]; OECD, 2016[11]). In addition, electronic communication networks provide platforms for efficiently matching buy and sell orders outside traditional exchanges (Flicker, 2004[12]). The stock market turnover ratio only reflects trading that takes place on the stock exchange. A decline in this ratio can therefore reflect a re-orientation of activity away from traditional exchanges rather than decreases in total trading activity.
Secondary market liquidity is partly influenced by the free float ratio (the portion of a company’s total shares available for trading). A lower free float is typically associated with a lower turnover ratio. The market capitalisation-weighted free float ratio in Sweden is 76%, which is towards the lower end of the distribution among peer countries (Figure 2.11). This is partly an effect of the prominence of family-owned investment companies in Sweden, which play a central role in the country’s capital markets. These companies often retain significant ownership stakes, leaving a smaller proportion of shares available for public trading and thus contributing to a lower free float (even if family ownership often represents a much more significant share of votes than of market capitalisation, see sections 2.4 and 2.6). Only 34% of stocks in Sweden have a free float ratio above 75%, which is comparatively low (Figure 2.11, Panel B).
Note: In Panel A, the free float ratio is weighted by market capitalisation.
Source: OECD Capital Market Series dataset, LSEG and Bloomberg; see Annex for details.
2.1.5. Takeovers
There is significant takeover activity on the Swedish public equity markets, partly underpinned by the domestic regulatory structure (see Box 2.3). While the number of takeovers has fluctuated significantly, it has been on a general upward trend over time. Between 2010 and 2016, Swedish marketplaces saw an average of 15 takeovers per year, rising to 21 per year between 2017 and 2024. In value terms, the average deal volume rose from USD 7 billion to USD 11 billion over the same periods. Takeovers involving target companies listed on an MTF have become more common over the years. However, as expected given the smaller size of the target companies, these transactions account for a larger share of the total number of deals than of their overall value (Figure 2.12).
In 2023, total deal volume dropped to USD 21 billion, the lowest level since 2013. However, 2024 saw a sharp rebound, reaching a record 28 deals and a total value of USD 14 billion. Macroeconomic factors such as falling interest rates have contributed to this recovery, with rising IPO activity, greater participation from private equity and an increase in large strategic deals adding to positive momentum (EY, 2025[13]).
Source: Swedish Securities Council.
The Swedish takeover regulation follows the same self-regulatory structure described in Box 2.1. and Box 2.2. Certain basic rules (primarily results of implementing the EU Takeover Directive) are laid down in the Swedish Takeover Act, while most detailed rules are found in the Takeover Rules issued by the Swedish Stock Market Regulation Committee. The Swedish Securities Council can interpret the Takeover Rules and grant dispensations in individual cases, with delegated authority from the Swedish Financial Services Authority.
A statement from the Council can usually be obtained within days and will rarely take more than two weeks. Quick and predictable access to binding statements concerning the compliance of a proposed bid structure, granting legal certainty, is viewed by practitioners as one of the key factors behind the high takeover frequence in Sweden.
2.1.6. The role of MTFs in the Swedish equity market ecosystem
One of the key features of the Swedish public equity markets is the dynamism of the MTF markets. Two-thirds of all Swedish public companies (597) are listed on an MTF, and since 2014 nearly 80% (827) of the total number of new listings in Sweden have been on MTFs. This level of activity is much more significant than in most comparable countries. This has given smaller, higher risk, growth-oriented companies widespread access to public equity financing. There is evidence suggesting that this has helped drive innovation in Sweden which, according to the European Innovation Scoreboard, was the most innovative EU member state from 2017 to 2022, overtaken by Denmark in 2023 (European Commission, 2024[14]; Ström et al., 2023[15]). However, despite the high number of companies listed on MTFs, their total market capitalisation is still relatively modest at just above USD 20 billion, representing only 2.5% of the Swedish total. The regulated markets – particularly Nasdaq Stockholm – remain by far the most significant venues (Figure 2.2).
Market participants have noted that many, though by no means all, companies opting to list on MTFs in Sweden could in fact qualify for listing directly on the regulated market. One reason they choose to list on MTFs instead is the faster, and therefore more cost-effective, listing process. Moreover, since the regulatory frameworks for both venues are broadly similar, with comparable listing requirements (see Box 2.1), the difference in terms of investor demand between MTFs and regulated markets is, in some cases, not big enough to justify the additional costs of a regulated market listing. Relatively higher retail engagement in the MTFs compared to regulated markets helps support this dynamic, but there is also institutional investor presence on these markets, including domestic pension funds (see section 2.5.1).
A key aspect of the Swedish MTF markets is that they function as a stepping stone to listing on the regulated market. Since 2013, an average of 45% of new listings on regulated markets annually have come from an MTF (Figure 2.13). This is a critical point – this natural movement between growth and main markets means domestic companies have continuous access to equity funding throughout their development and creates a pipeline of companies for the main market, increasing investor interest, which, in turn, increases the incentives for companies to list on an MTF in the first place. This dynamic is partly an effect of the above-mentioned compliance with regulated market requirements by many MTF-listed companies (which follows from similar treatment in Swedish regulation), as well as a natural consequence of the large number of companies on the Swedish MTF market. Another factor might be a restriction under Swedish law which limits the trading of own shares to regulated markets, meaning MTF-listed companies are not permitted to conduct share buybacks (Finansinspektionen, 2016[16]). Some companies may opt to move to a regulated market to gain access to this option.
Source: Nasdaq Stockholm, Nordic Growth Market, First North Growth Market.
Another notable feature is the role of external advisors, mandated by the exchanges, that serve to help MTF companies in the listing process and to comply with market rules thereafter. This model is inspired by the Nominated Adviser (Nomad) system used on the London Stock Exchange’s AIM market. Major MTF operators, notably Nasdaq First North (“certified advisers”) and NGM Nordic SME (“mentors”) impose a mandatory requirement to retain such advisers, at least for a certain period of time (Nasdaq, 2015[17]; Nordic Growth Market, 2024[6]). The advisers are certified by the exchange and can be, for example, corporate finance firms, accounting firms or investment banks. In the Nasdaq model, certified advisers operate under the exchange’s rules to support companies listed on First North (including First North Premier). Certified advisers serve as intermediaries between the company and the exchange and are responsible for guiding companies through the listing process, ensuring they meet initial requirements, and assisting with ongoing compliance and disclosure obligations. Even after listing, certified advisers continue to monitor companies and provide support. This regulatory guidance helps companies navigate increasing regulatory complexity as they grow. In addition, certified advisers may offer trainings for corporate management and boards as well as updates on recent regulatory developments.
At the beginning of March 2025, 51 certified advisers were registered with Nasdaq, operating across the Nordic markets (Nasdaq, 2025[18]). A similar system applies on the NGM Nordic SME market, with sponsorship required for the first two years post-listing. The market had 21 registered mentor firms as of March 2025 (Nordic Growth Market[19]). The external adviser structure has helped simplify the listing process and strengthen corporate governance standards as well as improve operations among smaller listed companies.
Sweden has a globally significant private equity (PE) industry that is active both domestically and internationally. It is home to the world’s third largest PE firm by assets under management. The sector’s economic impact is substantial. According to industry association statistics, PE firms own around 1 200 Swedish companies, employing 260 000 people (Riksbanken, 2024[20]). There is also considerable venture capital activity. Together with the active public markets, this provides Swedish companies with access to a diversity of domestic equity funding throughout the corporate lifecycle that is relatively rare among countries in the European Union.
Across a range of measures, Sweden represents a share of European PE activity that far exceeds its economic heft. In the past decade, Swedish PE firms have represented an average of 9% of European fundraising, 3.2 times more than its GDP share, second only to the United Kingdom. In 2022, when Swedish funds represented over 16% of total fundraising, three of the top five largest funds closed in Europe were headquartered in Stockholm, the other two being in London (PitchBook, 2023[21]). Similarly, Swedish companies have received 40% more PE investment and been divested 90% more than GDP weight would suggest.1 This outperformance has been consistent over time (Figure 2.14, Panels A and B).
Note: "Europe" refers to all 27 EU member states, plus Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, San Marino, Serbia, Switzerland, Ukraine, the United Kingdom and the Vatican City. Fundraising by location of private equity firm advisory teams. Investment and divestment by location of portfolio firms.
Source: Invest Europe.
Given the size of the Swedish PE industry relative to its economy, the Swedish fundraising landscape is very international, with a substantial share of total fundraising coming from foreign investors. In the last five years, domestic investors have accounted for no more than 9% of aggregate fundraising, by far the lowest share among peer countries. Together with the United Kingdom, Swedish PE firms have the largest share of non-European investors (Figure 2.15). This reflects above all the global character of very large Swedish PE firms such as EQT and Nordic Capital.
Note: The analysis only includes funds raised where the origin of the investor is specified. "Europe" refers to all 27 EU member states, plus Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, San Marino, Serbia, Switzerland, Ukraine, the United Kingdom and the Vatican City. By location of private equity firm advisory teams.
Source: Invest Europe.
Among the five PE firms that have raised the largest amount of money globally during the past five years, three are based in the United States and two in the EU. Stockholm-based EQT ranks third, having raised USD 99 billion (Table 2.1). The growth of EQT as a major global PE player reflects Sweden’s long history of active family ownership (see also section 2.6). Its founding in 1994 followed from a mandate by Investor AB, the Wallenberg family’s investment company and one of the oldest industrial holding companies in Europe. The fact that it was closely involved in the founding of EQT allowed the latter to draw from the industrial expertise of a long-term owner, facilitating the development of an investment model focused heavily on improving corporate operational performance that would grow to serve as the primary model for the global private equity industry.
Note: Refers to the amount of private equity capital raised between 1 January 2019 and 31 December 2023.
Source: Private Equity International (2024[22]) PEI 300: The world's largest private equity firms, https://www.privateequityinternational.com/pei-300/#pei-300-full-ranking.
It is also notable that the banking industry has been part of this development from the beginning, both directly and indirectly. Not only is Investor AB a major owner of SEB, one of Sweden’s largest banks, but SEB itself was one of the three initial backers of EQT, together with Investor AB and US PE firm AEA Investors (EQT[23]). The connection between the banking sector and the development of (non-bank) capital markets illustrate the dynamics through which the Swedish ownership model has fostered an environment where banks do not restrict the development of non-bank financing (even if Sweden remains a predominantly bank-based economy).
It is not just the nationality, but also the character, of the largest capital providers to Swedish PE firms that differs compared to many other countries in the EU. Uniquely among EU peer countries (but in line with the United Kingdom), pension funds have been the single largest investor category (32%) in Swedish PE funds over the past five years (Figure 2.16). This primarily refers to investment by large international pension funds. Swedish pension funds only allocate 4% of total asset to private equity (Riksbanken, 2024[20]). However, one of the six main funds in the Swedish public pension system, AP6, is focused entirely on private equity investments, managing SEK 68 billion (c. EUR 5.9 billion).
Note: "Europe" refers to all 27 EU member states, plus Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, San Marino, Serbia, Switzerland, Ukraine, the United Kingdom and the Vatican City. By location of private equity firm advisory teams.
Source: Invest Europe.
Like in other countries, buyout is by far the largest PE segment in Sweden, representing about three quarters of aggregate investment in the last decade, a share that has remained relatively stable over time. It is notable how much global PE investment in Swedish companies has picked up in the last five years. Total investment – buyout, growth, venture capital and other types – has more than doubled from an average of just below EUR 3 billion from 2007-18 to over EUR 6 billion from 2019-23 (Figure 2.17, Panels A and B). This is driven primarily by significant investments in 2021 and 2022, following a period of extensive monetary policy expansion and consequent low cost of debt. The reversal of such policies (most notably quantitative easing and near-zero policy rates) may lead to decreases in PE activity and lower exit multiples for investors.
Note: "Europe" refers to all 27 EU member states, plus Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, San Marino, Serbia, Switzerland, Ukraine, the United Kingdom and the Vatican City. By location of portfolio firm.
Source: Invest Europe.
The industry distribution of Swedish firms receiving PE investment is largely in line with that in Europe more broadly (Figure 2.18). Biotech, healthcare, computer and electronics companies have received more than half of total investment in the past five years – an indication of the role that external private equity, like its public market equivalent, can play in allocating funding to innovative ventures that have the possibility of enhancing economic productivity more broadly. Three industry groups – biotech, healthcare, computer and electronics; business products and services; and consumer goods and services – have received 84% of all PE investment in the last five years. Among these, the first is markedly higher in Sweden than Europe on aggregate, whereas the last is significantly lower.
Note: "Europe" refers to all 27 EU member states, plus Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, San Marino, Serbia, Switzerland, Ukraine, the United Kingdom and the Vatican City. By location of portfolio firm.
Source: Invest Europe.
The way in which private equity firms exit their investments at the end of the holding period has important implications for capital markets more broadly. Uniquely in Europe, the most common type of divestment of Swedish firms in the last five years has been a public listing (29% by value). In all other EU countries analysed, a sale to another PE firm is the most common divestment option, with exits through public listing being the exception (Figure 2.19, Panel A). Large flows from private to public funding, i.e. exits by public listing, are indicative of a well-functioning public market and a dynamic broader market ecosystem without missing links between different types of funding. These same dynamics can be seen in the high share of new listings on the regulated domestic market coming from the growth market (see Figure 2.13, Panel B).
It should be noted, however, that dominant exit types change with market conditions. Public exits were common in 2020 and 2021, when public market valuations were favourable, but fell in 2022 (although remained high compared to most European countries). Conversely, sales to other PE firms were relatively less common during these years, but increased sharply in 2022, representing over nearly half of all divestments by value. Since 2011, the two exit types have tended to move inversely, with a correlation coefficient of -0.54 (Figure 2.10, Panels B and C). Recent years have seen an increase in intra-PE sales and sometimes extensions of holding period. This has contributed to an increase in transactions, known as secondaries, where existing investors (the limited partners) sell their stakes in the fund, often to manage liquidity needs (Bain & Company, 2024[24]). The same is true for so-called continuation funds, where sponsors sell their assets to a newly established fund instead of liquidating at the end of the initial term. Limited partners can then choose to transfer their investments into the new fund (Kastiel and Nili, 2024[25]).
Note: "Europe" refers to all 27 EU member states, plus Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, San Marino, Serbia, Switzerland, Ukraine, the United Kingdom and the Vatican City. By location of portfolio firm. Shares are calculated based on deal value.
Source: Invest Europe.
While naturally a smaller part of the private equity market in absolute terms than buyout and growth, a vibrant venture capital (VC) industry is critical to the development of capital markets and to economic dynamism more broadly. Without risk-willing investment available for innovative ventures, an economy will eventually stagnate. In 2023, Stockholm-headquartered firms had the third highest total VC deal value among European cities at EUR 3.4 billion, behind London (EUR 11.9 billion) and Paris (EUR 4.0 billion) (PitchBook, 2024[26]). The level of VC investment into Swedish firms is also relatively high in a European context. VC investment as a share of GDP has averaged 0.12% in the last five years, the third highest among peer countries after Denmark (0.13%) and the United Kingdom (0.14%). Like the larger, mature PE segment, VC saw sharp growth in 2021 and 2022. Seed investment – funding of companies at the earliest stages of development – has increased substantially since 2016, peaking in 2021. Because these transactions are smaller than investments in later-stage companies, seed funding still makes up a small share of total VC investment but remains an important source of early-stage corporate funding (Figure 2.20, Panels A and B).
Note: By location of portfolio firm.
Source: OECD (2025[27]) Venture capital investments (market statistics), http://data-explorer.oecd.org/s/1o9
2.3.1. Capital structure and performance
Equity financing accounts for over two-thirds of Swedish corporations’ total funding, a level comparable to Denmark, France and the United Kingdom, but well above the euro area figure of 58% (Figure 2.21, Panel A). A significant portion (68%) of this is in the form of unlisted shares. While the balance between listed and unlisted equity varies across countries, there has been a general shift towards unlisted equity financing over time, a trend driven in part by the growing availability of funding in private markets, which benefited from the low cost of debt in the aftermath of the 2008 financial crisis. The share of listed equity fell by more than 20 percentage points between 2005 and 2024 in the United Kingdom and by 10 percentage points in the euro area. In contrast, the share of listed equity in Sweden rose modestly from 29% to 32%. This increase was, however, smaller than in Denmark, where it grew by 18 percentage points over the same period.
Source: ECB and ONS Sector Accounts.
In 2022, 61% of listed companies in Sweden paid dividends, the highest share among peer countries. This marks an increase from the 2005-15 average of 52% (Figure 2.22, Panel A). Among dividend-paying companies, the median company paid out 40% of its net income (payout ratio) in 2022, around the middle of the distribution among peers (Panel B).
Note: Panel B shows the ratio of dividends to net income, calculated for companies that have paid dividends and reported positive net income. The median value is computed for each year, and the average value is calculated based on the annual median values over the specified period.
Source: OECD Capital Market Series dataset, LSEG, see Annex for details.
Comparing listed companies on regulated markets and large unlisted firms (here defined as those with assets exceeding USD 100 million) can help identify potential barriers to accessing public markets. If a significant number of large, profitable companies remain unlisted, it is important from a policy perspective to assess whether regulatory constraints play a role. As shown in Figure 2.23, the revenue of the median listed Swedish company is twice that of the median large unlisted firm (USD 256 million versus USD 121 million) (Panel A). Since Swedish listed companies are already among the smallest in the peer group, however, there might not be significant untapped source of public market activity in the unlisted company universe. Even so, the 80th percentile of large unlisted companies generates revenues of USD 409 million, indicating at least some potential for further growth in the Swedish public equity market based on the existing universe of companies. Operating margins are very similar between listed and large unlisted companies in Sweden (Panel C).
Note: Based on country of headquarters. Listed companies only include those listed on main markets. Large unlisted companies are defined as those with total assets exceeding USD 100 million. Operating margin is calculated as operating income divided by total sales.
Source: OECD Capital Market Series dataset, OECD-ORBIS Corporate Finance dataset, LSEG, see Annex for details.
There are, however, significant differences in balance sheet composition between large unlisted companies and listed companies in Sweden, with the latter tending to have significantly higher capitalisation levels. At the end of 2022, the median capitalisation of listed companies was 46%, compared to 34% for large unlisted companies, which instead rely more on long-term debt.
Source: OECD Capital Market Series dataset, OECD-ORBIS Corporate Finance dataset, LSEG, see Annex for details.
The Swedish public equity market is characterised by a significant presence of institutional investors (Figure 2.25). The level of investment fund ownership is particularly notable, although part of this refers to pension fund investments through funds (see Figure 2.37) At the end of 2024, traditional institutional investors – investment funds, pension funds and insurance companies – collectively owned more than half of all listed companies in Sweden. In terms of voting rights, however, their ownership is somewhat lower in regulated markets, due to investment firms/private equity and foundations wielding more voting power than their capital holdings would suggest, given the widespread use of dual class share structures in Sweden and the strong presence of strategic family owners (see Figure 2.30 and section 2.6). Households also play a significant role, representing nearly 15% of ownership in regulated markets and around 7% in MTFs, which should be seen as a lower bound due to the relatively high share of undisclosed ownership information for MTF-listed companies.
Note: Refers to shares of identified holdings. Unidentified holdings (typically where ownership shares are below regulatory thresholds) account for 12% of capital ownership in companies listed on regulated markets and 32% on MTFs. The “Others” category includes all owners that do not fall into any of the other seven categories, containing primarily corporate owners.
Source: Modular Finance Holdings database.
For international comparisons of ownership structures, a proprietary OECD database of capital ownership is used. To ensure cross-country comparability, the classification of investor categories differs somewhat from the Swedish data shown in Figure 2.25. The OECD database has five main categories: institutional investors; public sector; strategic individuals; corporations; and other free float. The broad trends are similar. Institutional investors were the largest owners of Swedish equities at the end of 2024, in line with patterns in peer countries and global trends. Their ownership stake of 38% is higher than the EU aggregate of 32%, but below levels in peer countries such as the United Kingdom and the Netherlands, as well as the global aggregate of 47%. Strategic individuals were the second-largest owner category, holding 13% of total market capitalisation (Figure 2.26). Their significant share is partly driven by the strong presence of high net-worth individuals, owning large shares of Swedish public equities through their stakes in family-owned investment companies, as further discussed in section 2.6.
Source: OECD Capital Market Series dataset, FactSet, LSEG and Bloomberg; see Annex for details.
Domestic investors are prominent on the Swedish market, holding 46% of total public equity capital, the highest share among peer countries (Figure 2.27, Panel A). This can in large part be attributed to a set of large, domestically owned investment companies and a well-developed asset-backed pension system (see section 2.5). Direct household ownership is also widespread. Over 2 million people (nearly one-third of the adult population) own shares directly in a listed company, not including their ownership through investment companies or funds (Swedish Securities Market Association, 2024[28]). While foreign investors are naturally also significant, their share in total ownership is the lowest (23%) among the peer countries, and well below the EU aggregate of 34%. Notably, most of the foreign investor ownership in Sweden comes from institutional investors, accounting for 19% of market capitalisation and nearly 80% of total foreign ownership in the country (Panel B).
Note: The category “Other free float” in Panel A represents shares in the hands of investors that are not required to disclose their holdings and for which no information is therefore available.
Source: OECD Capital Market Series dataset, FactSet, LSEG and Bloomberg, see Annex for details.
Focusing on the largest investor category, institutional investors, about half of ownership in Sweden refers to international entities. This is significantly lower than in most peer countries. Domestic institutional investors held 19% of the total equity in Sweden at the end of 2024 – substantially higher than the EU aggregate of 6% (Figure 2.28, Panel A). Both foreign and domestic institutional investor ownership is primarily concentrated in a few key sectors, such as industrials, financials and technology (Panel B). These three sectors together account for 67% of total institutional investor ownership in the Swedish equity market, driven by large international companies such as Volvo, Ericsson and SEB.
Source: OECD Capital Market Series dataset, FactSet, LSEG and Bloomberg, see Annex for details.
The Swedish equity market has a relatively dispersed ownership structure in terms of capital. In 2024, fewer than a quarter of companies had a major shareholder owning more than 30% of the equity − a markedly lower share than the EU average of 57% (Figure 2.29, Panel A). The same is not true when considering vote ownership, which is much more concentrated given the widespread use of dual class share structures (see Figure 2.30).
Ownership concentration tends to be particularly high in companies controlled by founding families, individual entrepreneurs and wealthy individuals. Notably, strategic individuals are the largest shareholders in nearly 40% of Swedish companies. In these companies, they hold an average share of 25% of capital (Figure 2.29, Panel B). Corporations and institutional investors are the largest shareholders in 36% and 25% of companies, with average ownership stakes of 23% and 20%, respectively. The public sector, on the other hand, is only the largest shareholder in 1% of companies, with an average stake of 16%.
Note: Panel B shows the share of companies where each investor category is the largest shareholder, and the average share of equity held by that category in those companies. For example, strategic individuals are the largest shareholder in 37% of companies; in these companies, strategic individuals own an average of 25% of the equity.
Source: OECD Capital Market Series dataset, FactSet, LSEG and Bloomberg, see Annex for details.
Dual-class share (DCS) structures, granting certain shareholders higher voting rights compared to their equity ownership, have been present in the Swedish corporate landscape for over a century. By the end of 2024, 45% of companies listed on the regulated markets had DCS structures, representing more than two-thirds of the total market capitalisation (Figure 2.30). This is among the highest share in Europe (ISS, 2023[29]). DCS are less prevalent on MTFs, corresponding to 26% of market capitalisation.
Business organisations generally see DCS structures as well-functioning in Sweden, arguing it contributes to a stable and long-term investor base that allows companies to adopt a strategic, long-term operational outlook (Confederation of Swedish Enterprise, 2023[30]). The domestic model of active family ownership notably relies in large part on the use of DCS structures. Since 1945, Swedish law allows for a maximum 1 to 10 voting ratio between the weakest and strongest voting shares (before which there was no upper limit).
The disproportionate control granted by DCS is however a subject of discussion elsewhere, notably in continental Europe, sometimes raising concerns regarding for example minority shareholder protection and potential misalignment of interests. Countries adopt varying approaches to DCS, some allowing different degrees of voting rights per share, others requiring companies to seek shareholder approval after a certain period to retain them (Pereira, 2023[31]). Box 2.4 provides a summary of how these issues are balanced in Swedish regulation. Given different regulations across EU countries, the European Commission proposed a new directive in December 2022 aiming to facilitate the listing of SMEs with provisions on how they can adopt DCS structures, as a way to encourage founders to access capital markets while retaining control of the company (European Commission, 2022[32]). In 2023, the European Council adopted a negotiating mandate on this proposed directive which was formally adopted in late 2024. After entering into force, member states have two years to adopt the legal and administrative provisions necessary to comply with this directive.
Source: Bloomberg, OECD Capital Market Series dataset, LSEG; see Annex for details.
The Swedish corporate governance model is almost entirely hierarchical; management is completely controlled by the board of directors, and the board of directors is in turn controlled by the general shareholder meeting, which for most intents and purposes has unrestricted legal competence to decide on any matter concerning the company, including at a detailed business level. To ensure that the board elected by shareholders is not in effect controlled by management, the Swedish Corporate Governance Code requires not only that the board is elected by the general shareholder meeting, but also that it is proposed by a nomination committee consisting of shareholder representatives, appointed by shareholders at the general meeting. This implies that a shareholder with practical majority control of the votes in the company can exert significant control, but also that efficient governance requires there to be a shareholder, or a coalition of shareholders, that monitors the company, engages with the board, and proposes and votes on important matters such as the election of board directors. Dual class share structures have been allowed in Swedish law for over a century to facilitate such engagement. Since the 1940s, shareholders have been allowed to adopt a voting structure where one share class has up to 10 times the votes of the weakest share class.
The most prominent challenge in a system built on shareholder control is the risk of the controlling shareholder abusing minority shareholders. To mitigate this risk, Swedish corporate law provides a very extensive framework for minority protection (Lekvall, 2014[33]; Gilson, 2014[34]; Nenova, 2003[35]), consisting of, among other things:
Equal treatment of shareholders: A general prohibition on any decision by the general shareholder meeting or actions by the company that in practice leads to unequal treatment of shareholders.
Individual shareholder rights: Extensive individual shareholder rights, allowing any shareholder (regardless of the size of their holdings) to add items to the agenda of the general shareholder meeting, to ask the board questions at the general shareholder meeting, and to challenge a decision by the general shareholder meeting in court (with the court being able to invalidate a decision and even replace it with another).
Shareholder rights for significant minority shareholders: A shareholder or a group of shareholders holding more than 10 per cent of the shares in a company can demand that an extraordinary general shareholder meeting be held, that a special accountant is elected to ensure that minority interests are considered in the audit, that a legal review is carried out to investigate if any particular event in the company complies with corporate law, and even that minimum dividends are paid.
Majority vote requirements: For most major general shareholder meeting decisions except the election of the board, the Swedish Companies Act requires that the decision be approved by a qualified majority, ranging from two-thirds to total unanimity. In these cases, both votes and capital are counted, ensuring that a DCS structure does not allow a majority shareholder to dominate important corporate decisions.
2.5.1. Pension funds
Pension funds and capital markets have a symbiotic relationship. Investing in global capital markets helps ensure the solvency of asset-backed pension systems, contributing to better retirement outcomes for pensioners. At the same time, when they are sizeable, pension funds also contribute to the development of capital markets (Babalos and Stavroyiannis, 2020[36]; Niggemann and Rocholl, 2010[37]). Pension funds can thereby provide dual benefits to the real economy, directly by financing corporate and sovereign investment, and indirectly by laying the foundations for access to other funding by increasing the depth of capital markets. Establishing a well-functioning channel between pension funds and capital markets is therefore a key policy concern. Unlike the United States, where pension fund assets total nearly 150% of GDP (US Federal Reserve, 2024[38]), sizeable asset-backed pension funds are relatively rare in Europe. Instead, most European countries rely to very large extent on pay-as-you-go models where pension disbursements are funded by taxes (or levies/fees) on the current working population. Sweden is an exception to this norm. Household pension entitlements amount to 300% of GDP, over a third of which (109% of GDP) is funded. It is one of only three EU countries with a sizeable share of funded entitlements, together with the Netherlands where almost half of entitlements are funded and Denmark where about three quarters are funded. Sweden’s share in aggregate EU pension fund assets is more than seven times higher than its GDP share would suggest (Figure 2.31, Panels A and B). This gives Swedish capital markets access to a significant source of domestic funding.
Note: Data not available for Poland.
Source: Eurostat, ECB.
While the Swedish funded pension system has developed over a long time, most of the growth in assets under management is relatively recent. Total assets in the pension system, including public, occupational and certain earmarked private assets, have grown by 158% since the 2008 financial crisis, reaching a total of SEK 8.9 trillion (EUR 764 billion) at the end of 2023 (Figure 2.32). Over half of this growth came from increases in occupational pension fund assets, but the assets under management in the public pension system are also significant. Together, these two systems represent 96% of earmarked pension assets in Sweden. They are described in turn below. It bears noting that private savings invested in capital markets that are not earmarked for pension savings (such as through ISK accounts) are also significant in Sweden – these are addressed further under section 2.7 dealing with household savings. It should also be emphasised that the distribution of assets under management does not reflect average pension disbursements for retirees – public pensions represented 70% of average pension disbursements in 2023.
Note: Refers only to actual investment assets, excludes future contribution assets. Assets in the income pension system refer to the total assets under management of AP1-4 and AP6. Assets in the premium system include AP7 and all private funds. Occupational pension assets refer to those managed by life insurance firms and dedicated occupational pension companies (reported as an aggregate figure until 2021). Private pensions include private pension savings through life insurance companies and occupational pension companies. Other individual pension accounts (like IPS, for which statistics have been discontinued since 2019) are not included. Inflation adjustment is done using CPIF inflation (excluding household interest costs on housing).
Source: Swedish Pension Agency annual reports, AP funds' annual reports, Insurance Sweden.
The public pension system
The Swedish public pension system has three main components: the income pension system, the premium pension system and the guarantee pension system, illustrated in Figure 2.33. The first two components are heavily invested in global capital markets through the six AP funds (AP1, AP2, AP3, AP4 and AP6 for the income pension system and AP7 for the premium pension system). Box 2.5 provides a more detailed description of the public pension system and its history.
The original Swedish public pension system, established in 1913, was the world’s first near-universal social security system. It had two main components: a fee-based pension based on individual taxable income and a means-tested supplementary pension funded by general taxes (Edebalk, 2013[39]). The system has since then undergone two major reforms that saw it become increasingly connected to capital markets. The first was the introduction in 1960 of a general supplementary pension (allmän tilläggspension, ATP) funded by mandatory contributions by employers and employees on top of the basic public pension that had been established in 1948. The ATP system tied pensioners’ benefits to their income and number of working years, meaning it effectively transformed the view of pensions in Sweden from a state allowance to a deferred salary (Swedish Pension Agency[40]). As part of this reform, three public pension funds – the first, second and third AP funds – were established to safeguard the solvency of the pension system. These funds were restricted to investing in fixed income securities. This changed in 1974 with the creation of the fourth AP fund, which was the first fund that was eligible to invest in Swedish public equities (AP2[41]). In other words, Swedish wage-earners have had a stake in domestic equity market development through the pension system for half a century.
In the ATP system, disbursements were tied to a price index. This led to a growing disconnect from real economic developments when economic growth stalled. Coupled with increases in life expectancy, also not accounted for, this threatened the financial solvency of the system. A second major reform was therefore initiated to replace the ATP system in the 1980s, eventually resulting in today’s framework, which has been operational since 2003. It applies to the vast majority of the population; the old ATP system applies fully only to people born before 1938 with transition measures for those born between then and 1953 (Regeringskansliet, 2020[42]). The current public pension system, illustrated in Figure 2.33, has three main components and is largely independent from the central government budget.
The largest component is the income pension system. Each year, 18.5% of working individuals’ pensionable income, up to a maximum of 7.5 income base amounts (IBA) is withheld. IBA is an inflation adjusted measure used to calculate the income pension; 7.5 IBA is equivalent to c. EUR 49 600 in 2024. Of this, 16 percentage points are used to fund disbursements in the public income pension system (Swedish Pension Agency[43]). These contributions give individuals proportional pension rights for their own retirement, effectively a claim on the pension system. If contributions exceed disbursements on aggregate in the system, the surplus is channelled in four equal parts to four of the AP buffer funds (AP1-4) and subsequently invested in global capital markets. Conversely, if there is a deficit, this is funded in equal parts by disbursements from these buffer funds (AP2[44]). Today, there are six main funds, AP1, AP2, AP3, AP4, AP6 and AP7 (the funds have been renumbered and reformed over time). The first five are buffer funds for the income pension system. AP6, while technically a buffer fund, is focused entirely on private equity investments, giving it an illiquid portfolio. It therefore has a closed-end structure and does not receive or disburse any payments to the pension system on a regular basis (Swedish Parliament, 2020[45]).
The remaining 2.5 percentage points are allocated to the premium pension system. Unlike the income pension contributions, premium pension contributions are paid into a dedicated account belonging to the individual making the contribution. They are therefore a type of mandatory private pension savings (and classified as such in the national accounts). The default option is for this capital to be managed by the state-run AP7 fund, which consists of an equity fund and a fixed income fund (the allocation between them shifts automatically depending on the account holder’s age, becoming increasingly conservative as people near retirement). However, in addition to the default option, individuals are also free to choose from a large range of privately managed funds (currently more than 400). There are no fees for switching funds, nor any limitations on the number of switches allowed (Swedish Pension Agency[46]). Individuals can start drawing from both the income and premium pensions from the age of 63 (Swedish Pension Agency[47]).
The third and final component of the public pension system is the guarantee pension system, which secures a minimum pension level for people with no or low income pensions. This component is financed through the central government budget.
The six AP funds managed a total of SEK 3.4 trillion (c. EUR 294 billion) in the second quarter of 2024. This corresponds to 18% of total public pension assets, with the remainder referring to total contribution assets, i.e. future pension contributions (AP2[44]). AP7, the premium pension system fund, is by far the largest, representing about 40% of total AP assets. Around half of total assets in the premium pension system are managed by AP7. The other half is managed by different private funds (Swedish Pension Agency, 2024[48]). The four main buffer funds are roughly equal in size, while the PE-focused AP6 is significantly smaller. AP7 has historically used leverage to boost returns. It currently maintains a leverage level of approximately 25%, achieved through investments in derivative securities (AP7[49]).
Perhaps the most notable feature of the Swedish public pension system is the high allocation to equities. The four main buffer funds are all allowed to invest in a mixed portfolio, both with respect to asset classes and geographic exposure. Among them, public equity as a share of total assets under management (AUM) ranges from 40% to 65%. Of this, between a quarter and a third represents domestic equities. This gives Swedish companies access to a significant pool of long-term institutional investor capital, providing an advantage, all else equal, compared to countries with lower shares of funded pensions and with less capital market-oriented pension funds. Pension fund involvement in domestic equity markets is not limited to the regulated markets. AP1, AP2 and AP4 all directly hold shares listed on the main local growth market (Nasdaq First North) as well. However, restrictions with respect to maximum allowed levels of ownership in individual companies, coupled with the relatively smaller size of MTF companies, serve to limit widespread MTF investment by pension funds. AP1 to 4 are not allowed to hold shares or other participations in a company that would give them more than 10% of total voting rights (Act (2000:192)[50]). Pension fund investment on MTFs is therefore restricted to the largest companies. Nevertheless, their engagement lends a legitimacy to these markets that contributes to a capital market ecosystem that encourages smaller companies to go public, as is evident from the large number of companies listed on Swedish growth markets (see section 2.1.6).
Numerous factors have contributed to the significant allocation of assets to domestic equities. One is simply the attractive historical returns of the Swedish equity market (see section 2.1.1). The domestic corporate governance model’s strong focus on shareholder control, notably through nomination committees (see Box 2.4), is also important since it allows large investors like pension funds significant influence in corporate governance and management decisions, reducing the perceived investment risk of equities. Another aspect that may have contributed is the regulation that the AP funds are subject to with respect to foreign currency exposure. By law, no more than 40% of each fund’s assets can be subject to currency risk (Act (2000:192), 2000[50]). This means that at least 60% of the funds’ assets must be invested in instruments denominated in Swedish krona or hedged to mitigate currency risk. The requirement has, however, been a topic of discussion, especially following periods of significant exchange rate movements. For example, in 2022, the Swedish krona depreciated significantly against major currencies, which could have positively influenced the funds’ returns if not for the mandatory currency hedging. An industry report has noted that these legal restrictions on currency exposure limit the potential benefits from such currency movements and recommended that the government reevaluate this policy (Investment & Pensions Europe, 2023[51]). Moreover, the funds themselves have indicated that these regulations impose liquidity constraints (AP6, 2024[52]).
Note: Public equity exposure is based on funds’ disclosed allocation by asset class and includes potential exposure through investment funds. Domestic equity shares have been calculated based on direct holdings where available. AP4 equity holdings include "defensive equities" (c. 9% of total equity holdings) which have not been classified according to geography. AP6 has no public equity data since it focuses on private equity. For AP7, public equity as a share of AUM is calculated by dividing the value of the AP7 Equity Fund’s public equity holdings by the combined total AUM of the AP7 Equity Fund and the AP7 Fixed Income Fund.
Source: Fund holdings and annual reports.
The focus on equities is also clear in the pension system more broadly. Figure 2.35 compares the share of equities in total financial assets for all pension funds (not just public ones) in European peer countries. Sweden and Denmark stand out due to the high direct allocations to equity. Nearly a quarter of the assets in the Swedish pension system are direct equity holdings (of which 72% is publicly listed securities) – more than one and a half times the euro area aggregate. In addition, over half of Swedish pension funds’ total assets are held in investment fund shares for which look-through data are not available for international comparison. Based on the public AP funds’ portfolios and direct and indirect (look-through) exposure of occupational pension funds (see Figure 2.37), total equity exposure by Swedish pension funds is likely to be significantly higher due to their holdings of investment fund shares.
Note: Equity holdings refer only to direct holdings, not holdings through collective investment undertakings. For international comparability, pension funds are here defined in line with sector S129 in the 2010 European System of Accounts (ESA 2010), which excludes buffer funds, and is not restricted to public funds. Following this definition, Swedish pension funds’ total assets amounted to SEK 8.4 trillion (EUR 737 billion) at Q3-2024.
Source: ECB.
The occupational pension system
Sweden has long had an extensive occupational pension system. Its establishment was the key ambition that drove the introduction of the ATP system in 1960. Today, over 90% of Swedish employees are covered by a semi-mandatory occupational pension scheme (Regeringskansliet, 2020[42]). Given the scope of the Swedish occupational pension system, fund assets are very substantial, representing 49% of total pension fund assets, the largest component of the pension system (Figure 2.32). However, for the average earner the mandatory public pension remains the most important. Mandatory private schemes represent no more than a fifth of the Swedish gross replacement rate (pension benefits at retirement relative to earnings when working) of 76% (Figure 2.36).
Note: Shows the replacement rate of the average earner. Quasi-mandatory schemes are the ones covering at least 85% of employees. Such schemes exist in Denmark, the Netherlands, Sweden and the United Kingdom.
Source: OECD (2023[53]) Pensions at a Glance 2023: OECD and G20 Indicators, https://www.oecd.org/en/publications/pensions-at-a-glance-2023_678055dd-en.html.
Like the public pension system, the occupational system has moved from a defined benefit towards a defined contribution model over time. All employment that is governed by a collective agreement between unions and employers’ confederations (roughly 90% of Swedish employees) includes occupational pension coverage. There are different schemes depending on employment type; those with white collar employment under collective agreement in the private sector are covered by a specific scheme called ITP, negotiated between the Swedish trade union association PTK and the Confederation of Swedish Enterprise. Similar to the public premium pension fund AP7, while there is a default fund choice for the management of the ITP pension, it is also possible for individuals to choose among a number of funds and investment strategies. The contributions to these schemes typically range between 4.5 and 6 per cent of the monthly salary, up to 7.5 income base amounts annually (equivalent to a monthly salary of SEK 47 625 or EUR 4 050). For income above this amount, a much higher contribution of between 30-31.5 per cent is applied (Collectum[54]; Konsumenternas[55]).
Similar to the asset-backed part of the public pension system, occupational pension funds in Sweden have a much more equity-focused investment approach than those in peer countries. Total equity exposure represents half of the aggregate portfolio. The majority of this refers to direct holdings of listed equities (37%), followed by unlisted equities (7%) and indirect equity exposure through investment funds (6%). Total equity exposure is 12 percentage points higher than in the Netherlands, the second most equity-intensive market, and as much as 42 percentage points higher than in Germany. This allocation has contributed to sustained growth in total assets over time – as of the third quarter of 2024, total Swedish occupational pension fund investment assets were larger in absolute euro terms than those in France and Germany, economies that are more than five and seven times larger, respectively (Figure 2.37).
Note: Data not available for Denmark. Panel A shows shares of total investments. Derivatives exposure is negative in the Netherlands. Panel B show shares of total investment fund investments. Panel C includes direct investments in listed and unlisted equity as well as indirect investments through equity funds (excluding mixed funds).
Source: EIOPA IORP statistics, Office for National Statistics (ONS).
2.5.2. Insurance companies
Insurance companies help stabilise economic conditions for households and corporations, influencing their capacity and willingness to invest. Beyond their role in enabling risk-sharing they are, like pension funds, key participants in capital markets themselves, providing long-term financing to corporations and governments alike.
The insurance market is typically divided into two main subsectors: life and non-life insurance. Life insurance covers financial risks related to the death of the insured, providing payments to one or more designated beneficiaries. Non-life insurance, on the other hand, includes various policies that protect against risks such as property damage, health issues, and accidents, offering financial compensation for unexpected events. Investment strategies differ across these segments. While non-life insurance companies invest in shorter-duration assets to manage frequent claims payments, life insurance companies focus on longer-term investments aligned with the extended timelines of the payouts (Svensk Försäkring, 2024[56]). In Sweden, the insurance industry consists of 31 life insurance companies, 202 non-life insurance companies and 24 mutual benefit associations.2 The industry is highly concentrated, with a few firms dominating the market. Despite the smaller number of life insurance companies compared to non-life companies, the former group manages significantly more assets.
As of the third quarter of 2024, Swedish insurance companies (excluding occupational retirement provisions of life insurance undertakings) managed assets equivalent to 71% of the country’s GDP, roughly in the middle of the distribution among peer countries (Figure 2.38, Panel A). Despite restrictions on portfolio composition (see Box 2.7), Swedish insurance companies, like pension funds, maintain substantial exposure to equity markets. Their combined direct equity holdings and indirect exposure through investments in equity funds grew from SEK 1 186 billion in 2017 to SEK 2 406 billion in the third quarter of 2024. Equity holdings by insurance companies have also grown as a share of GDP, particularly from 2018 to 2021 when it peaked at 40% (Panel B).
Source: EIOPA, Bank of England, Eurostat, OECD. Data covers insurance groups reporting under Solvency II.
High levels of equity investment are evident when looking at the portfolio composition of Swedish insurance companies. The largest share of their investment assets (62% as of the third quarter of 2024) is allocated to investment funds, a proportion significantly higher than that of their international peers (Figure 2.39, Panel A). Notably, equity funds dominate this category, accounting for 57% of the total, also the highest share among peer countries (Panel B). While direct equity investments are smaller, they still represent nearly a fifth of total assets. In contrast, investments in debt (including direct holdings of corporate and sovereign bonds as well as debt funds) make up the smallest share of Swedish insurance companies’ investment assets.
Note: Data covers insurance groups reporting under Solvency II.
Source: OECD, EIOPA, Bank of England.
Overall, Swedish insurance companies have by far the highest total equity allocation (direct and indirect) among peer countries. As of the third quarter of 2024, equity accounted for 53% of total assets, far exceeding peer countries such as France (23%), the Netherlands (13%) and the United Kingdom (9%). In contrast, Swedish insurance companies have the lowest allocation to government debt, representing just 6% of total assets, compared to an average of 16% among its peers (Figure 2.40, Panel A). This limited investment in sovereign debt partly reflects a low level of Swedish government debt, which at the end of 2023 amounted to the lowest share of GDP recorded since the mid-1960s for the central government (Riksgälden, 2024[57]). Representatives of the Swedish Debt Office have noted that “excessively low” government debt can pose challenges with respect to market liquidity, undermining the role of government securities as a safe asset and thereby complicating their use as a risk-free benchmark, with implications for pricing and hedging in other markets (Bjellerup and Rådahl, 2023[58]). Among Swedish insurance companies’ total bond investments, government bonds constituted only 36%, with Denmark being the only peer country where insurance companies allocate a smaller share of assets to government debt (Panel B).
Note: In Panel B, total bond exposure excludes exposure through funds. It does not consider other debt instruments.
Source: OECD, EIOPA, Bank of England. Data covers insurance groups reporting under Solvency II.
The fact that Swedish insurance companies allocate a much larger share of their assets to equities than their peers on aggregate can partly be explained by the larger proportion of policyholder assets in unit- and index-linked portfolios (Figure 2.41, Panel A). In these insurance contracts, policyholders pay not just to cover the insurance premium, but an additional amount which is allocated to a diversified basket of assets, for which the policyholder assumes the investment risk. The asset allocation therefore tends to be less conservative than for other insurance contracts. This is not the only explanation, however, since Sweden exhibits the highest equity allocation among peer countries in both unit-linked and non-unit-linked portfolios (Panel B).
Note: Data covers insurance groups reporting under Solvency II. In Panel B, the breakdown by asset category and portfolio type is not available for the United Kingdom.
Source: EIOPA, Bank of England.
The Swedish insurance sector is regulated and supervised by the Swedish Financial Supervisory Authority (Finansinspektionen, FSA), a government agency under the Ministry of Finance. The primary legal frameworks to which these companies are subject include the Insurance Business Act (IBA), the Commission Delegated Regulation (EU) 2015/35 (Solvency II Regulation) – integrated into the IBA since its implementation in 2016 – and additional regulations and guidelines issued by the FSA and the European Insurance and Occupational Pensions Authority (EIOPA) (Vinge, 2022[59]). These regulations significantly influence which instruments insurance companies can invest in. Insurance undertakings are subject to strict capital requirements and investment restrictions. The Solvency Capital Requirement (SCR) under Solvency II mandates that insurers maintain sufficient capital to meet their obligations with 99.5% probability, and this cannot fall short of the Minimum Capital Requirement (MCR) which sets a threshold below which insurers cannot operate. Moreover, investment allocations must aim to limit risks and be made in instruments for which risks can be effectively identified, measured, and monitored. The use of derivatives is permitted only if they contribute to risk reduction or efficient portfolio management (Vinge, 2022[59]).
2.5.3. Investment funds
Investment funds have seen substantial growth in assets globally over recent decades and Sweden is no exception to this trend. Since the late 1970s, investment funds have served as an essential savings vehicle for Swedish households (see section 2.7). Their expansion has been further supported by increased investment from corporations and other institutions, making them an integral part of the country’s financial system. The market value of funds domiciled in Sweden has quadrupled in real terms since 2012, the year the ISK retail investment account was introduced (see Box 2.8). Direct equity investments followed a similar upward trend, reaching SEK 5.8 trillion (c. EUR 509 billion) at the end of 2024 (Figure 2.42).
Note: Total market value of funds is adjusted to account for the value of debts and/or demands.
Source: Statistics Sweden (SCB).
Swedish-domiciled funds are heavily exposed to public equity markets, with 69% of their assets invested in listed shares (Figure 2.43, Panel A), nearly double peer countries’ average allocation of 38%. Additionally, Swedish funds allocate 12% of their assets to other investment funds, which further boosts their overall exposure to equities. There have been notable changes in funds’ asset composition over time. From 2005 to 2015, total equity market exposure decreased, but has since regained importance. This evolution has mainly been characterised by a rise in direct investments in foreign companies, which grew from 35% of funds’ total market value in 2005 to 52% in 2024. In contrast, investments in domestic companies dropped from 33% to 18% over the same period. Additionally, Swedish funds have increased their investments in both domestic and foreign mutual funds (Panel B).
Note: Panel A refers to non-money market funds. The official UK statistics only disclose the split between listed and unlisted equity for domestic shares. The same split has been assumed to apply to foreign equities.
Source: ECB; Office for National Statistics (ONS); Statistics Sweden (SCB).
The strong preference for equity investments is also reflected in the distribution of funds based on their strategy. Equity funds are the largest category, accounting for 63% of the total value of funds (Figure 2.44, Panel A). Within this group, the share of assets in passive index funds has grown significantly over time, surpassing 20% in 2023 (Sveriges Riksbank, 2024[60]). This is in line with the growing global popularity of passive ETFs. In Europe, since the launch of the first ETF in 2000, the market has expanded significantly across asset classes, strategies and regions. By 2023, equity ETFs in Europe surpassed EUR 1 trillion in assets under management for the first time (LSEG, 2024[61]). Funds of funds (FoFs) rank second in terms of assets under management in Sweden. Unlike traditional funds, FoFs invest in other funds rather than individual securities. They can focus on, for example, mutual funds, hedge funds, private equity or real estate.
The ownership structure of Swedish funds is concentrated domestically, with 96% of assets held by domestic investors (Panel B.I). Among these, financial corporations are the largest owners, accounting for 77% of total assets. Of this, 33% is attributed to the premium pension system, 12% to unit-linked contracts, and the remainder to other financial corporations (e.g. proprietary trading firms) (Panel B.II). Premium pensions are mandatory, which explains their significant role in the investment fund market. Individuals can allocate their premiums to up to five investment funds from a wide range of options and have flexibility to adjust their allocations over time. If no choice is made, the premiums are automatically directed to the Seventh Swedish National Pension Fund, AP7 (see further discussion in section 2.5.1). Direct household holdings, separate from premium pensions and unit-linked insurance contracts, also represent a significant share (17%) of total ownership.
Note: In Panel B the "other" category includes non-financial corporations, local government, social security funds, non-profit institutions serving households and other domestic owners.
Source: Statistics Sweden (SCB).
Family-owned investment companies have contributed to Sweden’s economic development and corporate landscape since its industrialisation in the late 19th and early 20th centuries. Through their investment firms, families such as the Wallenbergs, the Lundbergs, and the Stenbecks have maintained significant ownership stakes in flagship companies for decades. The Wallenberg family, for instance, controls Investor AB, one of the largest investment companies in Europe, which alone owns nearly 4% of total Swedish public equity market capitalisation (Figure 2.45). Similarly, Industrivärden AB, LE Lundbergföretagen, Melker Schörling and Investment AB Latour, all controlled by their founding families, also rank among the largest owners of Swedish public equity. Together, these five family-owned investment firms own more than 8% of all Swedish public equity market capitalisation.
This ownership model has been supported by dual class share structures, which allow for a higher proportion of voting rights compared to capital stakes. As a result, these families have been able to take an active role in shaping Swedish corporate governance from an early stage. Since the 1930s, they have also themselves relied on public markets to raise capital, developing in parallel with the Swedish equity markets, which has served to align their interests with broad market growth and development.
Note: The figure shows ultimate parent names, so banks here refer to the funds operated by these banks.
Source: OECD Capital Market Series dataset, FactSet, LSEG and Bloomberg, see Annex for details.
The major family-owned investment firms in Sweden typically have long-term investment horizons. According to some market participants, this is a factor that helps them build deep expertise about their portfolio companies and institutional knowledge of market dynamics, enabling a more active and long-term ownership role. For instance, through Investor AB, the Wallenberg family owns major stakes in blue-chip companies like ABB, Atlas Copco, and SEB (Table 2.2). Similarly, the Lundberg, Douglas and Schörling families hold substantial stakes in well-known companies such as Volvo, Sandvik and Assa Alboy through their investment companies.
Note: Excludes individual investors.
Source: OECD Capital Market Series dataset, FactSet, LSEG and Bloomberg, see Annex for details.
Retail investment plays a fundamental role in capital market development, channelling household savings into the real economy and thereby increasing the funds available to finance productive investment. Equally importantly, it also directly benefits households, offering them opportunities to partake in corporate wealth creation and enhance financial well-being. Additionally, it can contribute to better local market functioning, notably increased liquidity, in particular for smaller company stocks.
Household involvement in capital markets (including indirect investments through investment funds, insurance, and pension funds) is substantially higher in Sweden than in the EU overall. This is driven by several factors, such as higher income and savings levels, the availability and simplicity of savings vehicles that meet consumer needs, as well as relatively high levels of financial literacy.
Sweden’s GDP per capita, measured in USD PPPs, has consistently remained higher than that of the EU and, by a small margin, higher than the average of peer countries (i.e. Denmark, the Netherlands, Germany, France, and the UK) (Figure 2.46, Panel A). As economic output rises, household income tends to increase, enabling them to allocate a smaller portion to essential expenses and direct more of their earnings towards savings, which in turn influences investment in capital markets. Extensive public social safety nets also mean that households do not need to allocate substantial portions of private savings to, for example, health insurance, leaving more funds available for investment (although to the extent that these services are funded by higher taxes, it also serves to reduce the disposable income available for saving, all else being equal). This is reflected in Sweden’s savings rate, which has persistently been one of the highest among its peers. The savings rate saw a substantial increase in 2020 following the COVID-19 pandemic, although gradually approached pre-pandemic levels in the following years. A similar trend is also observed in other countries (Panel B).
Note: In Panel A, GDP per capital is expressed in current international dollars, converted by a purchasing power parity (PPP) conversion factor. In Panel B, the household savings rate is defined as the share of household net disposable income that is saved.
Source: OECD, World Bank.
Swedish households' high savings are also reflected in their financial assets, which significantly exceed both the EU aggregate and the peer country average, with the gap widening over time (Figure 2.47, Panel A). However, greater growth in financial wealth in Sweden compared to peer countries is not just a matter of a higher savings rate. It is also related to the propensity to save through capital markets. As of the third quarter of 2024, Swedish households allocated the smallest share of their financial assets to currency and deposits among peers, at 12%. In contrast, they ranked first in the share allocated to listed equities (7.3%) and second in investment fund shares (10%) (Figure 2.47, Panel B).
According to Nasdaq figures, Sweden has the highest level of retail investor activity among the Nordic countries. In July 2022, retail investors represented 12% of total turnover on Sweden's main market. Retail activity is especially important for smaller companies: in the first seven months of 2022, retail clients accounted for nearly 30% of total trading volume on the First North Growth Market. Additionally, they play a key role in providing liquidity to new equity issuances. For example, in 2021, a year of substantial IPO activity (see section 2.1), retail investors accounted for 35% of the trading in the 10 days following Volvo Car's IPO (one of Sweden’s largest ever public offerings). Retail participation was even higher for the IPO of CTEK, reaching 45% (Nasdaq, 2022[62]). Over the last decade, the share of financial assets invested directly in listed equity has consistently been higher in Sweden than in peer countries and has trended upward, reaching a peak of 9% in 2021 (Figure 2.47, Panel C).
Consultations with market participants indicate that a high level of retail investment has contributed to the success of the self-regulatory model discussed in Box 2.1, by creating a significant reputation risk tied to any potential failure of the capital market system as a whole. Extensive household participation in these markets makes the preservation of investor trust essential to maintaining public legitimacy, and market stakeholders therefore have strong incentives to correct and avoid shortcomings that could damage their credibility.
Note: In Panel A, UK values between 2020 and 2023 are based on OECD calculations. EU-level data only available until 2022. The peer countries included in the average are Denmark, France, Germany, Netherlands and the United Kingdom. The official UK statistics used in Panel B only disclose the split between listed and unlisted equity for domestic shares. The same split has been assumed to apply to foreign equities. Includes the premium component of the Swedish public pension system.
Source: Eurostat; ECB; Office for National Statistics (ONS).
Despite significant household assets held in equities, the share of the population with direct holdings of shares in companies listed on Swedish markets has declined steadily over time, falling from 22% in 2000 to 10% in 2024 (Figure 2.48, Panel A). This downward trend is evident across all age groups, with the most pronounced absolute decline taking place among 55 to 64-year-olds, for whom participation dropped by more than 20 percentage points (from 36.3% in 2000 to 14.9% in 2024). The largest relative decline occurred among 18 to 24-year-olds, whose direct participation in equity markets decreased by 68%, from 14.7% to 4.7% during the same period (Figure 2.48, Panel B).
Note: Includes unlisted classes of stock in quoted companies.
Source: Statistics Sweden (SCB).
There has been a corresponding, albeit lesser, decrease in the share of total market value of companies listed on Swedish equity markets held directly by households (Figure 2.49). This share has remained around 12% since 2015, suggesting a growing concentration of direct holdings among fewer individuals. In other words, although fewer people participate directly in equity markets, those who do tend to hold greater amounts.
Source: Statistics Sweden (SCB).
However, the decrease in direct retail participation does not necessarily imply a reduction in household capital market participation. It could equally be a reflection of the growing prominence and popularity of other investment products, notably passive index funds. Indeed, in parallel to the decrease in direct retail participation, there has been a sharp increase in indirect equity holdings through investment funds, indicating a shift in preference as more affordable investment options have emerged in recent years. The rise has been particularly notable for equity and mixed funds, as well as for funds-of-funds (Figure 2.50).
Note: In 2014 SCB reclassified SEK 16 billion from the household sector to foreign owners.
Source: Statistics Sweden (SCB).
The widespread participation of Swedish households in capital markets in general, and investment funds in particular, comes on the back of long-standing government initiatives to promote ownership of different financial assets. Funds in which contributions were partially deductible against income tax were introduced already in the late 1970s to encourage household savings. Following this development, the Allemansspar savings programme was launched in 1984, enabling savers to put their money in an account or invest in different types of funds (Allemansfonder) with tax-free returns. These products became very popular, which persisted even after the removal of tax benefits in 1997 (Fondbolagens förening[63]). The introduction of the premium pension system in 1994 served to further strengthen household interest in capital markets (see section 2.5.1). More recently, in 2012, the government introduced a dedicated Investment Savings Accounts (ISK) with simplified taxation. Instead of taxing capital gains at the point of sale, a flat rate is applied to the total value of the account each year (Box 2.8). ISKs have become extremely popular, further incentivising savings in capital markets, notably funds and equities.
Since the early 2000s, digital investment platforms such as Avanza and Nordnet have also played a significant role in expanding Swedish retail engagement in capital markets by simplifying the investment process, thereby making it available to a broader audience through a focus on, for example, user-friendly interfaces, automated investment solutions and low fee structures. Activity indicators highlight their growing popularity, with a steady increase in users over time. Between 2013 and 2024, Avanza’s customer base grew nearly sevenfold, rising from 316 500 to 2.1 million, while Nordnet more than doubled its Swedish customer base from 209 600 to 475 100 during the same period (Avanza[64]; Nordnet[65]).
Significant retail activity has also been enabled by early and widespread adoption of digitalisation in Sweden, both in the public and private sectors. Sweden stands out internationally for its advanced online public services for both citizens and businesses with levels of investment in digital technologies exceeding the EU average (EC, 2023[66]). This commitment to digitalisation helps simplify activities like investment and enhances access to online services. A notable example is the electronic identification tool BankID, used to access public and banking services as well as to sign documents electronically. The country’s corporate sector also tends to exhibit a strong uptake of technology-driven solutions (EC, 2024[67]).
Another factor positively influencing participation in equity markets is a high degree of financial literacy. Recognising this, the European Commission has included it as part of its Capital Markets Union action plan (EC[68]). Additionally, developing a financial literacy strategy is a key measure of the Savings and Investments Union (EC, 2025[69]). Sweden ranks ninth out of 39 countries in the latest OECD/INFE international survey of adult financial literacy, reflecting its strong overall literacy levels while also highlighting areas for potential improvement. Swedish individuals stand out in particular when it comes to financial attitudes (i.e. beliefs and values related to money management), where they rank 3rd (Figure 2.51).
The Swedish Investment Savings Account (investeringssparkonto, ISK) is a flat-taxed investment account introduced by the Swedish government in 2012, designed to simplify the management of financial securities such as shares by retail investors. The account is available to people of all ages, making it a viable option for children as well. Ownership is individual.
Unlike traditional trading accounts, ISK accounts do not require individuals to report or pay regular capital gains to the tax authority. Instead, account holders are subject to a standardised annual tax, which is applied to the total market value of the assets held in the account (calculated as the sum of the market value of all assets at the beginning of each quarter, plus the sum of all deposits into the account, divided by four). This value is then multiplied by the government borrowing rate in the previous year plus one percentage point, with a minimum rate of 1.25%, to obtain a notional capital income. The resulting amount is then taxed at a flat rate of 30%, regardless of whether there have been actual capital gains or losses within the fiscal year. Importantly, taxpayers themselves are not responsible for these calculations; they are done by the institution managing the ISK account (e.g. a bank or fund management company), which then reports the notional capital income to the Swedish tax authority.
This simplified taxation model has contributed to the strong popularity of ISK accounts since their introduction in 2012, reaching approximately 3.8 million users (well over a third of the total population) in 2023 (Fondbolagens förening, 2024[70]). Despite their widespread adoption, the tax advantages that have typically been assumed to be associated with ISK accounts are not unambiguous. For one, any tax benefits assume excess returns above the standard tax rate (which was often at the lower bound in recent years, but which has increased sharply following increases in policy rates and government borrowing costs since 2022). In a 2018 analysis, the Swedish National Audit Office also noted that ISK accounts may not offer clear tax benefits, especially for very long holding periods (NAO, 2018[71]). In 2024 the government proposed changes to introduce unequivocal fiscal benefits to ISK accounts. Starting in 2025, the first SEK 150 000 (c. EUR 13 000) saved in an ISK or endowment insurance account will be tax-exempt, with this threshold set to increase to SEK 300 000 (c. EUR 26 000) in 2026.
Source: OECD/INFE (2023[72]) OECD/INFE 2023 International Survey of Adult Financial Literacy, https://read.oecd.org/10.1787/56003a32-en.
Over the past decades, several initiatives have been launched to improve financial literacy in Sweden, targeting key demographics. In 2010, the Swedish National Network on Financial Education was established, bringing together authorities, organisations and companies to enhance citizens' understanding of personal finance through educational projects (The Swedish National Network on Financial Education[73]). The initiatives include courses for professionals who support people in financial vulnerability, pensioners, and students in colleges and universities. Moreover, Unga Aktiesparare (Young Stock Savers) is a non-profit association founded in 1990, dedicated to helping young people build financial literacy and investment skills. Through its numerous local branches across the country, the organisation offers educational programmes, networking events, and other activities. Unga Aktiesparare also runs the "Young Private Finances" project, which reaches around 30 000 high school students each year, providing personal financial education through nationwide school visits (Unga Aktiesparare[74]).Sweden has also integrated financial education into the school curriculum and participates in Global Money Week, a campaign organised by the OECD that aims to raise awareness about the importance of financial literacy from an early age.
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← 1. Throughout this section, fundraising is based on the location of the PE firm’s advisory team whereas investment and divestment are based on the location of the portfolio company. Fundraising in Sweden therefore refers to capital raised by funds managed by Swedish PE firms from investors anywhere in the world. Investment and divestment refer to the funding received by and divestments of Swedish companies by any PE fund, regardless of where it is headquartered.
← 2. A mutual benefit association is an organisation that provides its members with specific benefits such as financial support for certain types of losses. Instead of paying insurance premiums, members usually contribute through a membership fee, which serves a similar function.