CapMan, the Finnish-headquartered private equity firm has announced the first close of its fourth mezzanine fund, CapMan Mezzanine IV at €105 million ($130 million).
Sixteen institutional investors have participated in the first closing alongside CapMan plc which committed €3 million to the vehicle. The majority of the investors are Finnish institutions that have participated in previous CapMan funds.
Capman Mezzanine IV will predominantly focus on middle market buyout opportunities in the Nordic region. The fund will concentrate on medium sized companies in the manufacturing, service and retail sectors with net sales of between €50 million and €500 million.
The fourth fund offers investors a new structure, allowing them to participate by subscribing listed secured bonds, which will be issued by a special purpose Finnish vehicle, Leverator plc. The intention is to list the bonds on the Helsinki stock exchange.
Commenting on the structure of the vehicle, the first of its kind in the Nordic region, Ari Tolpannen, CEO of CapMan said in a statement: “”The new fund structure offers more flexibility to investors who can choose to invest in listed bonds, limited partnership interests or a combination of these.”
The new fund sees the total of funds managed and advised by CapMan rise to approximately €1.8 billion.
At the same time as the first close of CapMan Mezzanine IV, the firm has also announced a change to its compensation system. In future, a maximum of 25 percent of the possible carried interest generated by the fund will be distributed to members of CapMan’s Nordic buyout team.
This process will replace the existing system, where part of the carried interest income that CapMan receives from its funds is paid to team members as annual bonuses.