Cash back

Palamon gears up for a potential fundraise.

Palamon Capital Partners, the European growth investor, has scored two significant exits as it shapes up for a run of realisations ahead of a potential fundraising effort later in the year.

The firm has sold Nordic financial services business Nordax in its entirety to Vision Capital and sold theme park Movie Park Germany to Candover portfolio company Parques Reunidos.

The sale of Movie Park Germany, the third largest theme park in Germany, cuts Palamon’s last tie with European leisure group Star Parks, a holding company created in 2004 to purchase seven theme parks from Six Flags. Financial details of the Movie Park sale were not disclosed, but a source close to the process pegged the deal value at €50 million. In total the Star Parks investment has generated Palamon’s LPs 2.3x their invested capital.

The Movie Park sale follows the €105 million exit of Nordic consumer finance business Nordax Finans earlier in the month. Palamon sold the business to Vision Capital, a UK headquartered private equity firm. The deal marked the first acquisition from Vision’s €680 million seventh fund and earned Palamon, which backed the formation of Nordax in 2003, a return of 3.7x invested capital for LPs in the its €440 million 1999 vintage first fund.

The deal reunited Vision managing partner Andrew Hawkins with Nordax’s management team. Hawkins, who joined Vision in 2007, had previously been a partner at Palamon, where he had been involved in the original investment back in late 2003.

Palamon partner Erik Ferm said in a statement that the deal demonstrated the success of Palamon’s “thesis-led investment approach in consumer finance”, referring to the fact that it created Nordax as a result of identifying the Nordic consumer credit market as being relatively immature despite operating in a fundamentally strong economy.

Vision Capital is better known for acquiring portfolios of assets, rather than individual companies, although the firm has done single asset purchases before. “The reason we end up buying portfolios is not because we like buying portfolios per se,” says Hawkins. “Our approach to doing deals is not to target specific industries or geographies, but is instead to figure out what strategic pressures exist on owners of businesses – typically owners of multiple businesses.”

In Palamon’s case, such pressure comes in the form of a desire to return capital to LPs ahead of a potential fundraise. Palamon confirmed that it was expected to be fundraising later in the year, but declined to indicate the target size. Its most recent fund closed on €670 million in 2006.

Other likely exit candidates in Palamon’s portfolio include Towry Law, a wealth management business with £4.5 billion (€5.2 billion; $6.9 billion) of client money under management or advice, and Loyalty Partner, the operator of Europe’s largest consumer loyalty card scheme.