Axcel surpasses $500m mark on Fund IV

The Denmark-based team – led by Christian Frigast – has upped its own fund commitment from 1% to 6% after its investment in jewellery company Pandora made a stellar return of around 30x.

Denmark-headquartered Axcel Partners has raised around DKK3 billion (€402 million; $530 million) for its latest fund, equalling its target, and is likely to hold a final close in the first quarter of 2011 with another DKK500 million committed, a source with knowledge of the fundraise said.

If the firm completes the process as expected, it will become one of only a very few firms to brave a difficult fundraising environment and raise its largest ever fund. In 2006 the firm closed Axcel Partners III on DKK3 billion.

Christian Frigast

The latest fundraising effort will have undoubtedly been boosted by Axcel’s hugely successful exit of jewellery retailer Pandora. The company, which is known for its charm bracelets, had an initial public offering in October, raising $1.8 billion. Since then, Pandora’s share price has steadily increased from DKK225 per share when it was listed to around DKK330 per share at press time. The increase in share price means the Pandora investment currently represents a 30x return for Axcel’s third fund, which still owns around 32 percent of the company’s shares.

The phenomenal success of the Pandora exit has made the individuals at Axcel, led by managing partner Christian Frigast, a considerable amount of money. As a result of the partners increasing their individual net worth, the team has increased its own commitment to Fund IV to 6 percent.

Limited partners like to see private equity investment professionals invest a significant amount of their own money – often referred to as “skin in the game” – in their own funds. In this way, the general partner has a genuinely vested interest making the fund a success and avoiding investment losses.

If the individuals become richer, then it stands to reason that LPs would like to see them put more capital on the line. For the previous Axcel fund, the GP capital commitment was just 1 percent.

Limited partners in Axcel’s third fund included several Nordic institutional investors, such as ATP PEP, Industriens Pension and Nordea Bank. The firm invests across a variety of sectors in companies based in Denmark and Sweden.

Axcel declined to comment.