The third party investors are primarily pension funds, investment companies and high net worth clients. Kaupthing initially intended to raise between £100m and £200m from investors but due to excess demand the amount was increased to £300m. The fund was raised in four weeks making it the quickest fund raising so far in 2007 – it is to close in the next few weeks.
Future unlisted investments made by the bank will be held by KCPII, which will be managed by
The establishment of the fund will increase transparency and provide clarity and discipline over Kaupthing Bank’s private equity investment strategy. The fund will also enable the Bank to take part in larger and more numerous projects and increase activity within other business segments of the Bank. According to Sherratt, the fund will look to invest in companies in the £50m to £500m range and will co-invest for larger deals. Kaupthing is a generalist investor but takes special interest in four sectors: consumer market, media, healthcare and business services in the UK and Nordic regions.
Kaupthing Bank is also preparing to commence activities in the Middle East. Operations will be based in the Gulf and Kaupthing Bank is currently in discussions with regulatory authorities in the region to obtain neccessary licences.
The Bank will initially focus on investment banking and wealth management in this region. But Sherratt said: “Private Equity is at the heart of the bank. We want to replicate our private equity success in all the regions in which the bank operates. So there is a good possiblity that we will explore private equity in the Middle East.”