German fund-of-funds NORD Holding has launched a €250m fund, simultaneously announcing a first close of €188m with investments from savings banks and pension funds, as well as parent NORD/LB, the investment bank.
The fund will focus on mid-market firms in both Germany and abroad, a strategy it feels gives smaller investors exposure to private equity that they are otherwise denied by the larger fund-of-funds.
NORD has set a hardcap of €250m in order to stick to this plan. “We are not aiming for size, instead we wish to offer our shareholders an ongoing attractive return”, said NORD Holding managing director, Matthias Kues.
The first fund-of-funds was launched in 2000 with €93m of commitments. It invested in 12 funds, and as of December 31. 2005, had outperformed its original target return of 15%. It most recently invested in Palamon European Equity II, which raised €670m.
NORD Holding’s main business is direct investing, focussing in particular on those companies facing succession issues as well as providing expansion stage financing for medium sized companies. Spin-offs from larger corporations are also an area of investment, that has increased in recent years.
The new fund-of-funds pushes NORD Holding’s managed funds volume above €600m.