Axcel Management has raised €810 million for its sixth vehicle after nearly two years in the market.
The Copenhagen-headquartered firm had an €800 million hard-cap for Axcel VI, according to a statement seen by Private Equity International.
Capital raised for Fund VI is 30 percent more than its €617 million, 2017-vintage predecessor, and it is the largest vehicle the firm has raised in its more than two decades in the industry. Some 65 percent of capital raised for Fund VI came from the firm’s existing LPs, Christian Schmidt-Jacobsen, a managing partner at the firm, told PEI.
Pension funds and insurers made up about 28 percent of the investor base, funds of funds 19 percent, family and corporate investors about 17 percent and the remainder included financial institutions, foundations and banks, he added.
The European Investment Fund is an investor in the vehicle, according to PEI data.
The firm began fundraising in the fall of 2019 and had a first close on around 65 percent of its target in the beginning of 2020.
“LPs last year were focused on internal portfolio matters which made it difficult for them to focus on new commitments,” investor relations officer Jesper Breitenstein said. “We had a tonne of meetings throughout covid-19 but the fundraising market conditions were more difficult than anticipated. Our strong pipeline allowed us to continue to invest out of this new fund.”
The firm has a longstanding commitment to the Nordic region and the focus of the sixth vehicle will remain unchanged.
“We think we can do plenty more in terms of growing in the Nordic region and cement our position in the market,” Schmidt-Jacobsen said. “As well as geographic diversification, the next step for us is also branch out into US investors and then Asia will be the next step for us.”
Fund terms of Fund VI were generally similar to Axcel’s prior vehicles, Breitenstein added. The firm’s GP commitment was 2.2 percent of capital raised, slightly higher than the firm’s earlier vehicles.
“The market is constantly moving and we’ve had to adapt,” Schmidt-Jacobsen said. “For historical reasons, we had come from an off-market position in fund terms and over a couple of funds have moved more in line with the market norm.” He noted that Fund VI also included more GP-friendly terms such as management fees and catch-up rates.
The pair have also not ruled out setting up continuation vehicles – funds set up to acquire existing assets where the GP remains the same – and noted the firm “could potentially look into those kinds of solutions for existing funds, although on a case-by-case basis”.
Axcel has four focus sectors: industrials, technology, consumer goods and healthcare. Capital raised for Fund VI has thus far been deployed across six deals including in veterinary clinic group VetGruppen, recruitment agency Moment and Swedish installation group Currentum.
Capital raising by Nordic-focused firms reached €3.7 billion as of the first half of 2021, more than double 2020’s full-year total of €1.8 billion, according to PEI data. Investor attraction to the region is driven by high-growth companies in the market that have delivered strong returns. Deals in Northern Europe generated the second-highest returns by region as of end-2020, according to eFront’s latest global private equity performance report. Sweden and Finland were among top performers, with returns of 32.2 percent and 28.9 percent respectively.
MVision acted as placement agent for the fundraise.