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Nordic mid-market attracts funds

Nordico Equity has been set up targeting investments in the Nordic mid-market. The fund is the product of a merger between Nordico Invest and the Sixth AP Fund’s business unit, Industrial Equity and will have SEK1.5 billion in managed capital with a portfolio of 20 companies. Lead investors include the Sixth AP Fund, KF and Bank of America Equity Partners. As lead investor, the Sixth AP Fund will work to double this capital.

Jan Ohlsson, currently CEO of Nordico Invest, will be appointed CEO of Nordico Equity. The fund will have a management team of 11 with offices in Stockholm and Gothenburg. The merger is an important step in the consolidation of the private equity market in Sweden, said Ohlsson. “Nordico Equity will be in an excellent position to take advantage of all the investment opportunities offered by medium-sized companies with growth potential that are in need of capital and active owners,” he said.

Nordico Equity will assume a portfolio of twenty companies. Industrial Equity, Sixth AP fund’s business unit, which has eight investments in its portfolio and Nordico Invest, which has 12 holdings are combining their investments in the new venture. The Sixth AP Fund will take over three quarters of KF’s stakes in Nordico’s existing portfolio holdings and three quarters of KF’s obligation for new investments in the fund. Bank of America Equity Partners, which has been a direct investor in Nordico Invest, will be a co-investor with Nordico Equity.

Brje Fors, CEO of KF, said: “Nordico Invest is a successful venture capital fund, with KF and Bank of America Equity Partners as lead investors. The merger with the Sixth AP Fund’s Industrial Equity will create a strong player in an important segment for growth in large parts of Sweden.”

The fund will invest in medium-sized goods and services growth companies in the Nordic region. Investments will be in the range of SEK30 million and SEK300 million. Ohlsson says that with the Sixth AP Fund, Nordico Equity will have a long-term lead investor and a professional organisation with offices in both Gothenburg and Stockholm to work with existing holdings and new investments. Other investors in the fund are the Fourth AP Fund, FreningsSparbanken, Sirius International, Lantmnnen, SLR and KP Pension & Frskring.

Industrial Equity is a business unit within the Sixth AP Fund, which is active in the same segment of the private equity market as Nordico Invest.

Nordico Invest was formed in 1999 with Swedish and international institutions as investors. A portfolio of 15 holdings was simultaneously acquired from KF Invest. Since then, three quarters of the portfolio has been realised with a high return for the investors.