Nordic private equity house CapMan has reached first close on its fourth mezzanine fund, CapMan Mezzanine IV, at €105m. The fund’s focus will be mid-market buyouts in the manufacturing, service and retail industries, mainly in the Nordic region. The maximum size of the fund will be €300m, and the final closing will take place end of March 2005, at the latest.
For the first time in the region, part of the fund is to be funded via the issue of secured bonds to be listed on the Helsinki Stock Exchange. The bonds will be issued by SPB Leverator plc, which will provide a loan facility to the fund managed by CapMan’s subsidiary established in Guernsey. Sampo Bank is acting as lead manager and bookrunner of the issue.
Sixteen investors have made commitments to the fund so far, the majority of which are located in Finland and have participated in the firm’s previous funds. CapMan is committing €3m.
For this new fund CapMan has introduced a modified compensation system. A maximum of 25% of the possible carried interest generated by CapMan Mezzanine IV will be distributed to members of the firm’s buyout team.
In the long term it is envisaged future funds will distribute 20% to 30% of the possible carried interest to the members of the specific teams in question, either buyouts, technology or life science.
It will replace the current system where part of the carried interest income CapMan receives from the funds it manages or advises is paid to team member as annual bonuses.