Who needs F2F to raise a ton of cash? On Thursday, Nordic Capital, the Stockholm-headquartered private equity fund known for its investments in global healthcare, along with other industrial, technology and financial assets across Northern Europe, announced the successful close of its tenth capital fund (Nordic Capital Fund X) at EUR 6.1 billion (about $7.2 billion).
According to a company announcement, the Fund was launched in April 2020 and was oversubscribed at its hard cap. It closed in less than six months, in a groundbreaking capital raise without holding any face-to-face meetings.
Fund X is the largest fund in Nordic Capital’s 31-year history, far exceeding its predecessor, Fund IX, which raised EUR 4.3 billion (about $5 billion).
Fund X will be invested across Europe, with a mandate for global investment in healthcare, and an emerging smaller global mandate for technology and payments businesses. Nordic Capital’s healthcare portfolio, its largest allocation, has made 26 platform investments since 1990, and currently generates EUR 4.3 billion in annual revenues.
“Considerable confidence”
In a statement, Nordic Capital Advisors Managing Partner Kristoffer Melinder said, “The rapid and successful close of our tenth fund is a significant milestone for Nordic Capital. To close at the hard cap in less than six months during the COVID-19 pandemic is a fantastic achievement that highlights the strength of our LP relationships and the considerable confidence that our blue-chip investors have in Nordic Capital. It is also testament to the strength of our team, proven investment strategy, the portfolio performance and Nordic Capital’s track record. We are grateful for the continued support of existing limited partners and delighted to welcome new investors to the Fund.”
Nordic Capital Advisors Head of Investor Relations Pär Norberg remarked on the remarkably remote nature of the capital raise. “We are very grateful for the tremendous investor support. We launched this fund in the middle of a global pandemic, which required investors to completely alter their investment processes to enable remote diligence,” he said. The success of the fund raise despite these challenges reflects the investors’ considerable confidence in Nordic Capital’s strategy and team.”
True to its global nature—some 80 percent of Nordic Capital’s investor capital comes from outside Scandinavia—Nordic Capital announced that Fund X drew investors from every continent on the planet, with 38 percent of commitments coming from North America, 27 percent from Europe, 17 percent from Asia, 15 percent from the Middle East, and 3 percent from the rest of the world.
The investor base is a fair mix of institutional investors. Public and private pension funds account for just under half (49 percent) of all commitments, sovereign wealth funds another 16 percent, fund-of-funds 13 percent, financial institutions around 11 percent and endowments and family offices accounting for 10 percent. Just over one-third of Nordic Capital Fund X’s commitments came from new investors. The re-up rate in Fund X by LPs who had previously invested in Fund IX was 90 percent.
Kristoffer Melinder said that Fund X already has a strong pipeline of potential opportunities in global healthcare, along with its European focused sectors (finance, technology and industrial).
“Nordic Capital’s investment strategy is based on finding growth businesses in our focus sectors where we can use our significant operational expertise and financial firepower to create value and, ultimately, excellent returns for our investors. The economic impact of the covid-19 pandemic will continue to be felt for some time and the most successful fund managers will be those who respond well to emerging trends and market dynamics to leverage new opportunities,” he said.
Lite bakgrund
Nordic Capital was founded in 1989 by Swedish investors Robert Andreen and Morgan Olsson, with initial commitments from a joint venture by insurer Skandia Liv and banking giant Svenska Handelsbanken to support its first fund.
Nordic Capital was a leading player in the creation and development of the buyout market in Sweden in the 1990’s. To date, it has invested EUR 14.5 billion in over 110 companies, and successfully completed 84 exits, including 18 IPOs. Its portfolio companies post annual average growth in EBITDA of 12 percent.
Today, Nordic Capital remains a leading advocate for private equity, which (per the company’s data) accounts for 30 percent of all foreign direct investment in Sweden.
Its healthcare portfolio includes German senior living and healthcare provider Alloheim Senioren-Residenze; mobility solutions provider Handicare, founded by three paralyzed men to provide innovative solutions including stairlifts, vehicle accessibility, patient transfer and lifting products for the physically disabled, and ArisGlobal, a life-sciences software provider based in Miami, Florida, that uses machine learning and advanced cognitive computing for drug safety and clinical development functions.
Nordic Capital’s portfolio also includes several Scandinavian industrial and manufacturing company, including steel contractor Bladt Industries, industrial safety technology producer Consilium, and Norwegian oil and gas well surveillance systems operator Resman.