Nordic funds raise record amount

A number of high-profile fundraisings saw private equity and venture capital firms raise €4.5bn last year, higher than the €4.2bn raised at the height of the technology boom.

Nordic private equity and venture capital firms enjoyed a record fundraising year in 2003, boosted by a number of successful campaigns by the region’s leading players, according to Initiative Europe’s Nordic Intelligence Report.

In total, Nordic firms raised €4.5 billion ($5.7 billion), seven percent higher than the previous record at the height of the technology boom in 2000, when firms raised a total of €4.2 billion.

Leading the way in 2003 were Altor Equity Partners, led by Harald Mix, which closed its debut fund on €650 million in June after only four months. Also in the money were Industri Kapital and Procuritas, with the former holding a €500 million first close of its €2.5 billion IK 2003 Fund, while the latter closed its third fund, Procuritas Capital Investors III, on €230 million.

Other firms to complete successful fundraisings included Nordic Mezzanine, which closed its Nordic Mezzanine Fund II on €230 million; Danske Private Equity, which closed its second fund of funds on €527m; and Accent Equity Partners, the Nordic mid-market investor created by the merger of Nordico and Euroventures, which held a €100 million first close.

The prospects for venture firms in 2003 picked up, with a number of firms announcing plans to expand their operations in the market. The Sixth Swedish National Pension Fund has unveiled plans to work with FörestagsByggarma focusing on the software, IT and technology sectors; while CapMan announced plans to expand its life science business. Additionally, the year saw the launch of the Siemens Mobile Accelerator in Finland and the arrival of UK biotechnology investor Merlin Bioscience in Helsinki.

The picture was not quite so rosy for buyout activity in the region, despite a pick-up in the second half of the year. Over the last two years the number of private equity-backed buyouts seen in the region has halved and the total deal value has been slashed to one-third of the 2001 figure. Major buyouts were thin on the ground in 2003 with only two transactions valued at over €250 million: Ratos’ acquisition of Tornet and the €540 million purchase of Danske Traelast by CVC. Some 23 other buyouts were completed below this value across the region in 2003.

“While the Nordic region kept a comparatively low profile in terms of deal activity in 2003, a rash of successful fundraisings and rising investor confidence indicate better times are ahead for both buyout and venture investors,” said Lyndon Driver, responsible for the Nordic Intelligence Report. “It would be surprising if these factors, coupled with growing international interest in the region, do not translate into 2004 surpassing the past 12 months both in deal volumes and values.”