Altor raises E650m in four months

The newly established Scandinavian buyout firm set up by Industri Kapital co-founder Harald Mix has raised E650m from blue chip institutions in an extraordinarily successful fundraising effort.

Altor Capital Partners, the Stockholm-based mid-market buyout firm, has held a final closing on its debut fund at E650m.

Originally looking to raise E500m, Altor held a number of pre-marketing meetings in December 2002 and January this year before launching the fund formally in the third week of February. First commitments to the fund were confirmed as early as in mid-March.

Commenting on the fundraising, Fredrik Strömholm, one of Altor’s four founding partners, said:  “We had an extremely positive spontaneous reaction from investors. Once they had bought into our regional focus, they looked at the team dynamics, and many became quite excited. The fact that we were never going to be a billion plus fund also meant that there was a lot of momentum among investors looking to commit early.” 

Altor’s most high profile founding partner is Harald Mix, co-founder and former co-CEO of Stockholm-based buyout house Industri Kapital (IK). According to Bloomberg, while at IK Mix was involved in 23 buyouts in the Nordic region since 1993. Ten of these investments have been sold, generating a return of over five times IK’s initial investment. Mix, a 42 year old Swedish National who left IK last year, serves as Altor’s chief investment officer.

Alongside Mix and Strömholm, a former member of Goldman Sachs’ M&A team in Scandinavia, John Cervin and Denis Viet-Jacobsen are also partners in Altor’s starting line-up. Cervin joined from Vinge, the law firm, where he was a partner, while Viet-Jacobsen moved from mezzanine capital provider Intermediate Capital Group.

Other members of the team include Jaakko Kivinen, formerly of Soros Private Equity, and Pontus Pettersson, who has worked for Investcorp and Goldman Sachs.

Altor attracted a long list of blue chip investors to the fund, which was significantly oversubscribed. Limited partners in the fund include Adams Street Partners, Allianz Capital, Goldman Sachs Private Equity Group, Harvard Management Company, Local Government Pensions Institution of Finland, NIB Capital Private Equity, Nordea Private Equity, Nordic Advisors (on behalf of Länsförsäkringar Liv), Pantheon Ventures, Princeton University Investment Company, Skandia Life Insurance Company Limited, the Investment Fund for Foundations, and funds advised by Standard Life Investments (Private Equity).

25 per cent of commitments by value were from the Nordic Region, 35 per cent from the rest of Europe, and 40 per cent from the US.
Altor’s mandate is to make equity investments of up to E75m in the middle market segment of the Nordic region. In a statement, Harald Mix said: “We believe investors have been particularly attracted to our focus on the middle market segment – by refocusing strategy and carrying out fundamental operating and financial performance improvements, we believe we can create significant value for our investors.'

Private equity funds concentrating on specific geographies within the European middle market are indeed faring well in an otherwise extremely testing environment for private equity firms raising money. UK based Graphite Capital, which recently closed a fund on £375m, and B&S of Italy are among the most successful fundraisers so far this year.

For some of the multi-billion buyout funds currently in the market looking for capital such as Terra Firma, Doughty Hanson and indeed Mix’s former group Industri Kapital, fundraising has been more difficult.

Altor’s result is also a great success for its placement advisors, Monument Group in Boston and Helix Associates in London. For Helix, which also represented Graphite, it is the second blow-out mid-market fundraising so far this year.