Nordic Capital beats €5bn target on Fund X first close

Nordic Capital has reached a first close on its 10th fund after launching in March and has done so without a single face-to-face meeting.

The Scandinavian private equity firm has gathered more than €5 billion for Nordic Capital X, thereby surpassing its original target, according to a source familiar with the fundraise.

Private Equity International reported in June that the firm was back on the fundraising trail, and that Nordic Capital X was seeking €5 billion.

Existing investors are understood to have comprised a healthy ratio of the fully digital capital raise.

The firm is expected to hold the final close on the vehicle in the coming months, the source added. The fund has a hard-cap of €5.75 billion.

Nordic declined to comment on the fundraising.

Massachusetts Pension Reserves Investment Management Board committed €175 million to Nordic Capital X, according to PEI data. The US pension invested in five prior Nordic funds over 17 years, according to May investment committee meeting documents prepared for MassPRIM.

The coronavirus has driven a flight to quality in fundraising as limited partners concentrate their relationships into a small subset of high performing and mega-funds. Data from PEI’s Investor Outlook on 2020 in Light of Covid-19 survey show that more than half of investors in March were considering or planning to reduce the number of new fund commitments made in 2020. Since then, investors have become more likely to maintain their number of planned commitments for this year.

Funds managed by large, established brands that closed in previous months include CVC Capital Partners VIII, which amassed €22 billion, and Vitruvian Investment Partnership IV, which gathered €4 billion.

Silver Lake has also exceeded the $18 billion target for its sixth flagship offering amid the pandemic. It is yet to wrap up fundraising for the vehicle.

Capital raised for Nordic Capital X will follow the strategy of the firm’s previous funds, targeting mid-market companies in Northern Europe, according to the meeting documents prepared for MassPRIM. Nordic backs companies operating in the healthcare, technology and payments, and financial services sectors. It will also make opportunistic investments in select industrial and business services companies, the documents show.

Nordic has not yet deployed capital from the fund, it is understood.

Thus far, Nordic Capital X is the largest vehicle the firm has raised since its inception in 1989.

The target for the vehicle is €1.5 billion more than the original target for its predecessor: the 2018-vintage Nordic Capital IX, which raised €4.3 billion upon its final close, according to PEI data.