Nordic Capital Successfully Completes its Largest Fundraise in Europe

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by KnowESG

Nordic Capital said it had raised its largest fund ever by closing Nordic Capital Fund XI at its hard cap of EUR 9 billion, which was more than its EUR 8 billion goal.

The fund, which closed in nine months in some of the most difficult fundraising conditions in private equity history, was one of the largest and fastest private equity funds created in Europe this year to date.

Nordic Capital Fund XI is more than 45% larger than its predecessor large-cap fund (Nordic Capital Fund X), which raised EUR 6.1 billion in October 2020, with a c.100% re-up rate and increased GP commitment.

Kristoffer Melinder, Managing Partner, Nordic Capital Advisors, said:

"The close of Nordic Capital’s largest ever fund is a significant milestone for Nordic Capital. It is a great accomplishment for the team to have gotten such strong commitments from both new and returning investors and to have easily surpassed the fund's target size. This happened during some of the most difficult times in the history of private equity fundraising. Over the last five years, Nordic Capital has made a point of growing the size of the fund in line with its changing, highly focused investment strategy and a strong pipeline of opportunities.

"The quality of a GP’s strategy and its ability to achieve true value creation at the company level is put to the absolute test in challenging economic conditions. With this successful close, investors have given a very strong vote of confidence in Nordic Capital’s strategy, our sector expertise, focus on operational and sustainable improvements, and ability to deliver highly attractive returns. Nordic Capital thanks them for their great support."

Nordic Capital Fund XI had a lot of interest from new and returning blue-chip investors from all over the world. They were interested in Nordic Capital's focused investment strategy, which includes its niche-sourcing and sub-sector expertise as well as its track record of creating value through business transformation and steady earnings growth.

Nordic Capital's strategy of focusing on non-cyclical growth businesses in partnership with management and with an emphasis on operational improvement has been proven right by the strong performance and resilience of the existing portfolio during tough macroeconomic times. Investors were very interested in its track record of portfolio growth, its ability to find deals and get them done, and its clear commitment to ESG.

In 2021, the companies Nordic Capital is currently investing in added 11% more jobs on their own. Since Nordic Capital started, its portfolio companies' annual sales have grown by an average of 12%, and their EBITDA by 15% each year.

Kristoffer added: “Nordic Capital Fund XI has already made three investments, partnering with great companies and talented management teams. Each is a great fit for the Nordic Capital strategy because it works in areas that our sector-focused investment advisory teams have found to be strong growth areas. This deep knowledge helps Nordic Capital and its investors when the market is volatile, and a strong Shadow Portfolio lets the funds invest only in the best opportunities. We look forward to maintaining this disciplined approach with Nordic Capital Fund XI.”

Nordic Capital Fund XI will continue to apply deep and specialist experience to its core sectors, including Healthcare, Technology & Payments and Financial Services, and selectively Industrial & Business Services.

Its mandate includes investments in mid-to-large companies in these sectors in Europe, as well as globally in Healthcare, Technology, and Payments.

Pär Norberg, Partner and Head of Investor Relations, Nordic Capital Advisors, commented:

“We would like to express our sincere gratitude to Nordic Capital’s truly global investor base. The fundraise of EUR 9 billion over nine months for Fund XI was made possible with the overwhelming continued support from our long-standing existing investors, with a c.100% re-up rate and strong backing from new investors, many of whom have chosen Nordic Capital as their only new relationship this year. We are humbled that in a busy year with volatile market conditions, investors have prioritised and partnered with Nordic Capital, and we are enthusiastic about continuing to nurture and strengthen these relationships.”

Over the past 30 years, Nordic Capital has tested and improved a sector-based sourcing process. This has already allowed the Fund to make three investments: in RiskPoint Group, a global independent speciality insurance underwriter based in Copenhagen with offices in Stockholm, Oslo, Helsinki, Amsterdam, Frankfurt, Zurich, Madrid, London, and New York; in Equashield, a leading global provider of hazardous drug compounding technologies whose products are sold on five continents and whose Closed System Drug-Transfer Device (CSTD) is the most used one in the US.

In the past year, Nordic Capital has had a strong deal pipeline, and its sourcing strategy has helped it invest in high-quality assets like Equashield, Cary Group, RiskPoint, ProGlove, Ascot Lloyd, Bilthouse, Care Fertility, RLDatix, Vizrt, Inovalon. It has also kept up its buy-and-build strategy for the companies in its portfolio. Nordic Capital has also sold all of its shares in three of its portfolio companies and some of its shares in public companies.

Fund XI brought in investors from all over the world, including 34% from North America, 31% from Europe, 23% from Asia, 10% from the Middle East, and 1% from other places. Institutional investors like public and private pension funds (42%), sovereign wealth funds (23%), fund of funds (14%), endowments and family offices (11%), and financial institutions (10%) make up the investor base.

With about 30% of commitments coming from new investors, the new fund makes Nordic Capital's list of blue-chip investors bigger. The re-up rate by capital of Fund X LPs in Fund XI is c. 100%. The Fund also got a lot of help from Nordic Capital's own team, as well as from the management teams of its portfolio companies and industrial advisors.

Source: Nordic Capital

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