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Society of Shareholders - the Swedish Capital Market Model Presented in a New GPW Report

The Warsaw Stock Exchange has published a report by the Strategy and Investors Relation Division titled “Society of Shareholders. Inside Sweden’s Thriving Capital Markets”, presenting the systemic conditions and structural mechanisms underlying the development of the Swedish capital market. The publication contributes to the ongoing European debate on the Savings and Investment Union and the role of capital markets in the provision of long‑term funding.

The Swedish capital market is characterised by a high level of efficiency compared to other European markets. The market capitalisation of domestic companies amounts to 159% of GDP, which is 2.5 times higher than the EU average. A total of 953 issuers are listed on Swedish exchanges, and investment results over the last 25 years show an average annual return of 7.9% in euro—comparable to the S&P 500 and above European benchmarks. Swedish households hold only 19% of their financial assets in cash and deposits, and the market remains one of the most active in Europe in terms of IPO volume, corporate bond issuance, and private equity and venture capital activity.

The report identifies five elements that collectively form the foundation of the long‑term development of the Swedish capital market and the stability of its institutional framework. The first is the funded pillar of the pension system, whose assets reached 115% of GDP in 2024. The high share of equities – approximately 87% in the default AP7 fund and around 50% in occupational pension plans – creates a stable base of domestic institutional investors, supported by low fees and broad product availability. The second element comprises tax incentives, including ISK accounts, where only a hypothetical non‑risk return is subject to taxation. This solution, used by around 40% of adult Swedes, strengthens households’ propensity to invest in equity instruments and contributes to the high share of equity funds in Sweden’s investment landscape.

The third area concerns the corporate governance model based on shares with differentiated voting rights, most commonly in a 10:1 ratio, enabling founders to retain control while raising capital from external investors. This model, complemented by regulatory protections for minority shareholders that go beyond EU requirements, supports a higher number of listings and greater market depth; between 2014 and 2024, the net increase in listed companies amounted to 522, which is exceptional compared with European trends. The fourth pillar is the private equity and venture capital ecosystem, in which IPOs serve as a key exit route, accounting for 29% of exit value in recent years. This supports the transition of companies from private to public financing and enables firms previously taken private through buyouts to return to the public market at later stages of development.

The fifth element is the competitive banking sector, which offers a wide range of investment products and responds to high customer mobility – over 16% of Swedish consumers changed their provider of investment products between 2017 and 2022, the highest rate in Europe. While banks remain an important source of corporate financing, they also support capital market development by distributing investment products and promoting broader participation among retail clients. High equity returns within the banking sector further reinforce public trust in long‑term investing.

Between 2000 and 2024, the median IPO size amounted to USD 8 million, confirming that the market also provides access to capital for smaller enterprises. The report concludes that the development of the Swedish capital market is the result of institutional consistency, stable systemic solutions and an investment‑oriented culture, while trust built at the local level plays a key role in maintaining a high level of investor participation.

The publication of the report coincided with the visit of the Swedish business delegation, Business Sweden, to the Warsaw Stock Exchange—one of the key elements of the official programme accompanying the state visit of the Swedish royal couple to Poland. The Swedish–Polish Capital Investment Meeting brought together more than 160 representatives of business, public administration, investment funds and financial market institutions from both countries. The event served as a platform for discussions on investment, innovation and the competitiveness of the European economy, as well as an opportunity to strengthen cooperation between the capital markets of Poland and Sweden.

“Society of Shareholders. Inside Sweden’s Thriving Capital Markets” - pdf file