Nordic closes €4.3bn Fund VII

The Northern European buyout firm has more than doubled the size of its previous fund, and opened offices in Oslo, Frankfurt and London.

Nordic Capital has closed its seventh fund on its €4.3 billion hard cap, having gone to market with a target of €3.7 billion. The firm’s previous fund closed on €1.9 billion in 2006.

Like its predecessor, Fund VII will target mid- to large healthcare, industrial and service companies in Europe.

After the fund’s marketing began in November 2007, “most of our existing investors came in more or less straightaway”, said Andrew Bennett, Nordic’s investor relations director.

The fundraising lasted a year altogether, as the firm said it was keen to bring in new investors in order to diversify its LP base geographically. Roughly 35 percent of Fund VII’s investors were from North America, compared to 40 percent in Fund VI. Approximately 15 percent of Fund VII’s remaining investors are from the Nordic region, while 30 percent are from the rest of Europe and 20 percent the rest of world.

Bennett said the firm was able to demonstrate to wavering investors that Nordic Capital’s target market was “still there” despite the credit crunch and worsening economic backdrop by completing several deals during the fundraising process.

One of these, US-based wound-care business Convatec, was the firm’s first investment outside Europe. The deal, struck in May, saw the successful syndication of $3 billion of acquisition finance facilities which, according to lead arranger Dresdner Kleinwort, were “almost two times oversubscribed”.

In connection with the establishment of Nordic Capital Fund VII, Nordic has opened offices in Oslo, Frankfurt and London in addition to its offices in Stockholm, Copenhagen and Helsinki.