Altor’s €2.5bn haul extends strategy to DACH region

German-speaking Europe has become part of the firm's core investment focus with the 'one-and-done' close on Altor Fund V.

Swedish manager Altor Equity Partners has raised €2.5 billion for a fund that will have German-speaking Europe as part of its core investment focus.

The mid-market firm also grew its investor base for Altor Fund V with capital commitments from family offices, banks and insurers in the DACH region, Laurence Zage, managing director of the fund’s placement agent Monument Group, told Private Equity International.

Altor, which has mainly targeted opportunities in the Nordic region since its inception in 2003, has closed a small number of non-Nordic deals over the years including in Germany, the US and France.

Altor’s expansion into DACH is steered by its Zurich office which was set up last year and is headed by two partners at the firm – Klas Johansson and Giovanna Maag – who joined the firm in August from 3i Group.

Zage noted that Altor extended its investment focus to DACH because companies there “shared similar characteristics with Nordic businesses and would be susceptible to the kind of value-adding investment process that Altor brings to its investments”.

The firm began raising capital for Fund V in September and held a first and final close on its target and hard-cap in early February, Zage added.

Fund V will have the same strategy as Altor’s previous funds, backing mid-market companies in consumer, services, energy and industrials sectors, with revenues of between €50 million and €500 million.

The oversubscribed fund received 93 percent of capital commitments from existing LPs which include US university endowments, foundations, pension funds and insurance companies, according to a statement. Nordic and DACH investors represent 32 percent of total commitments, with remaining capital being committed by investors mainly from the US, elsewhere in Europe and Middle East.

Investors in Altor’s previous funds include Finnish Local Government Pensions Institution , Argentum Asset Management, Pantheon and AP Fonden 3, according to PEI data.

Altor’s previous funds have generated since inception an overall gross internal rate of return of 26 percent. In addition, realised total returns have generated a gross IRR of 35 percent and a money multiple of 3.7x, according to the statement.