Altor closes on €2bn for latest fund

The firm has based the vehicle onshore for public relations reasons

Nordic-focused Altor has closed its latest fund on its target and hard-cap of €2 billion, according to a statement.

The fund, which officially came to market three months ago, had a significant re-up rate, according to a spokesperson. Approximately 90 percent of investors in the fund were LPs in previous Altor funds.

Only a select group of new investors were invited into the fund, Altor said. The investor base consists mainly of US university endowments, charitable foundations and pension funds.

41 percent of fund commitments came from the US, 23 percent from the Nordics, 18 percent from the UK, 11 percent from continental Europe, with the remaining capital coming from the rest of the world, according to the spokesperson. Altor also put in a GP commitment of €100 million, the spokesperson added – equivalent to 5 percent of the fund.

Placement agent Monument Group helped Altor with the fundraise. Similar to Altor’s prior fund, the new vehicle will have a 15-year term, allowing the firm to invest “in companies where a longer investment horizon is warranted”, the firm said.

Altor Fund VI will target mid-market companies in the Nordic region with revenues between €50 million to €500 million. The vehicle also has a flexible investment mandate, which also allows the firm to take minority investments in publicly traded companies and distressed debt.

It is the first Altor fund that will be domiciled in Stockholm. Altor’s prior funds were based in Jersey, the spokesperson said.

Altor has placed the fund onshore in a bid to improve private equity’s reputation in Sweden, the spokesperson said. “Discussions and media attention around tax planning and offshore tax havens are not very productive. We would rather spend our time and effort on developing successful companies together with strong management teams and successful entrepreneurs,” Harald Mix, a partner at Altor said.

“Private equity as a governance model represents a larger share of the overall economy in the Nordics than in most other regions in Europe. Providing increased transparency and adopting to a regulated environment will hopefully create a better overall understanding and knowledge of private equity as a successful ownership model,” he added.

Last year EQT Partners also moved its funds onshore. It also changed its corporate structure to become more open and transparent, the firm said at the time.

Private equity’s image in Sweden has suffered in recent years and continues to be a subject of public debate as the country prepares for a general election in September.

Last month, EQT’s managing partner Thomas von Koch said the sector needs to do “a better job of explaining the good of the industry by being more open and transparent … Frankly, we should all reflect on why the industry has such a bad reputation,” he told delegates at the European Private Equity and Venture Capital Association (EVCA) conference in Vienna. “In order to keep our license to operate, we need to move from being pure investors to being company owners [that contribute to] society as a whole. We need to further align our interest with our stakeholders. That will create sustainable superior [companies] and create trust.”

In July last year some of the country’s firms, including EQT, Altor, Nordic Capital and IK Investment Partners, teamed up with the Swedish Private Equity & Venture Capital Association (SVCA) to establish a code of conduct for the industry in an attempt to make private equity more transparent. The code will lay out how GPs should behave as company owners. The rules will relate to employees of portfolio companies, labour unions and transparency, as well as environmental, social and governance issues (ESG).