Nordic Capital nearing final close on Fund IX

  • Firm began pre-marketing Fund IX in 2016
  • New fund expected to close in early 2018
  • Fund VIII returning 16.2 pct IRR through Q3

Nordic Capital is expected to hold a final close north of its 3.5 billion euro ($4.18 billion) target in early 2018, according to a source with knowledge of the fund.

The firm began premarketing Nordic Capital Partners Fund IX in late 2016, according to Bloomberg. The firm officially launched the vehicle in mid-2017 and by October, several reports indicated Nordic was close to holding a close on its 3.5 billion euro target. Minnesota State Board of Investment documents from May put the target at 4 billion euros.

Minnesota approved a commitment of up to 150 million euros to the fund last year.

The fund will charge limited partners a 1.5 percent management fee on committed capital during the investment period, Minnesota documents show. The fee falls to 1.5 percent of drawn capital after its investment period concludes. The general partner will commit an amount equal to 3 percent of Fund IX’s cumulative commitments.

As with previous funds, Fund IX will be used to acquire upper-middle-market companies in the Nordic region, as well as in Europe and North America.

In 2010 Nordic Capital undertook a variety of initiatives to improve its internal investment and review structures, which led to a significant improvement in sourcing new investment opportunities, a Minnesota investment memo says. More than 90 percent of the platform investments Nordic made since then were completed outside broad auction processes, which tend to lead to costlier acquisitions.

In December, the firm used its eighth flagship fund to acquire German care-home operator Alloheim Senioren-Residenzen. The firm purchased a 90 percent stake in Swedish vehicle-glass repair and replacement company Ryds Bilglas later that month.

Fund VIII, which closed on 3.5 billion euros in 2013, was generating a 16.2 percent internal rate of return and 1.47x multiple on invested capital through Sept. 30, Minnesota documents say.

Nordic Capital has offices in Copenhagen, Frankfurt, Helsinki, Jersey, London, Luxembourg, Oslo and Stockholm. The firm was founded in 1989 and has invested almost 11 billion euros since its inception.

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Boats are anchored at the 17th century Nyhavn district, home to many shops and restaurants in Copenhagen, on December 5, 2009. REUTERS/Bob Strong

Update: The story was updated to include details about Nordic’s official launch of Fund IX in mid-2017.