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Litorina launches second fund

Swedish private equity firm, Litorina Capital Management, has launched its second fund, Litorina Kapital II. The fund has already secured commitments of SEK565 million, of which SEK450 million is available to invest immediately, and hopes to raise a total of SEK1 billion (approximately e108 million). Harold Kaiser, senior partner at Litorina Capital Management, said the fund had been well received domestically and is now looking for European investors to meet its target, hopefully by April.

The fund will provide expansion capital to Swedish small- and medium- sized companies with growth potential, concentrating on businesses with a turnover of around SEK25 million to SEK500 million. Kaiser said: “The present business cycle has created a favourable investment environment and we expect that the coming two years will offer interesting investment opportunities in our segment.” Litorina focuses on second and third round financings.

Litorina Kapital II has already exceeded the size of its predecessor, Litorina Kapital, a SEK500 million fund. The anchor investors in the new fund are Swedbank, which invested SEK100 million in the first fund, the European Investment Bank (EIB), also a repeat investor and new investor, The Third National Swedish Pension Fund.

The first fund made 13 investments and is fully committed with participations in sectors such as telecoms, software, technology, environmental industry, healthcare and services. The new fund will replicate the investment strategy of the first fund but Kaiser hopes to broaden the company’s investor base. The first fund has so far yielded one exit, Utfors, a spin-off from the University of Uppsala, which provides broadband access. Litorina invested in the company in June 1999 and it listed on the Stockholm Exchange’s O-list in December 2000.