Nordic Capital holds €1.7bn first close(2)

Nordic Capital has reached a €1.7 billion first close for its latest buyout fund, Nordic Capital VIII, according to a source close to the matter. 

The firm is expected to hold a final close at €3 billion this summer.  

Nordic Capital declined to comment on fundraising. Placement agent MVision Private Equity Advisers could not be reached for comment at press time.

The firm started fundraising in April 2012 with a €4 billion target, but reduced that to between €3 billion to €3.5 billion last October. At the time, sources close to the matter told Private Equity International Nordic did not wish to engage in a prolonged fundraising process, implying it was taking away from the focus on investing. “The fundraising is putting a major strain on their resources,” the source said at the time.  

Investors in Nordic’s Fund VIII include a number of heavyweight US pension systems including the Washington State Investment Board, Massachusetts Pension Reserves Investment Management Board, Virginia Retirement System, Oregon Investment Council (OIC), New Mexico State Investment Council, Oregon Public Employees' Retirement System, Michigan Department of Treasury and Los Angeles County Employees' Retirement Association (LACERA), according to Private Equity International’s Research & Analytics division. 

Nordic’s €4.3 billion Fund VII, a 2008-vintage, is nearly 80 percent deployed. It is understood the firm is likely to make one or two more investments from this vehicle, leaving some capital for add-on acquisitions. 

Nordic has generated a 3.8x return multiple and a 71 percent IRR on all of their exited investments, a source said in October. At the time, the return multiple on the exits in the last 18 months was believed to be 4.8x.

The Scandinavian private equity market is generally perceived as performing stronger than other European regions.  “Northern Europe, because it generally has stronger balance sheets and good export economies, a flexible labour market and high standards of education, has traditionally been a successful private equity market,” Francesco Di Valmarana, a partner at fund of funds manager Pantheon told Private Equity International in a recent interview. 

In December, Joakim Karlsson, a partner at Nordic, said although he still had some doubts about the eurozone, he was optimistic about 2013. “If I look at our pipeline, we have a decent deal flow, but there are very few structured auction processes. I don’t think we see a lot of companies being prepared for sale at the moment, but I imagine that will change towards the summer and the second half of 2013,” he said.