Nordwind raises €300m for German turnarounds

The Munich-based special situations investor has closed its oversubscribed debut fund on €300m, 70 percent of which was committed by US institutions.

Nordwind Capital, a Munich-based private equity firm established in 2002, has held a final close of NCP Fund I, a €300m (€373 million) equity fund aimed at making control investments in underperforming companies in Germany, Austria and Switzerland.

Nordwind, which did not use a placement agent for the fundraising, said in a statement the fund was significantly oversubscribed.

The firm started a premarketing phase in 2002 prior to circulating official investment documentation to potential investors in June 2003. When Nordwind was established, it reportedly intended to organise a €200 million vehicle.

The fund is a partnership incorporated in Delaware and administered by Schroders Administrative Services in Bermuda.

According to Norbert Danneberg, a partner in Nordwind, the fund has a structure designed to provide international institutional investors with a tax-efficient way of participating in Nordwind’s investments. Andreas Rodin of law firm Pöllath & Partners advised Nordwind on the structure.

Nordwind did not disclose any names of specific investors in the fund. According to market sources, Yale University’s endowment, which is a major investor in the private equity asset class, made a significant contribution.

Danneberg said in an interview that of the 21 institutions that committed, 70 percent are based in the US, 20 percent in Europe and 10 percent in Asia.

In terms of distribution by type of investor, 40 percent of the capital came from endowments, 21 percent from family offices, 22 percent from funds of funds and advisors and 17 percent from others. 

Nordwind will invest the fund mainly in medium-sized German businesses with financial or operational weaknesses that are either privately owned or part of larger corporations. The firm intends to invest between €20 and $60 million of equity capital per transaction. Target companies will have up to €1 billion in annual sales.

The most prominent member of Nordwind’s senior executive team is Hans Albrecht, who formerly served as head of German operations at The Carlyle Group. Other co-founders include Hans Maret, a former senior banker at Sal. Oppenheim and Anton Schneider, former CEO of Deutz AG.

Among the firm’s domestic competitors is Orlando Management, a Munich-based firm which in 2002 raised a €163 million special situations fund from international institutions including Danske Private Equity, Goldman Sachs Private Equity Group and LGT Capital Partners.