Danish private equity house Polaris Private Equity has held a final close on its fourth fund on DKr3.3 billion ($488 million; €441 million), Private Equity International has learned.
Polaris Private Equity IV, which had an initial target of DKr3 billion, officially closed during the summer. It held a first close in January 2015 on €300 million, and had already surpassed its target in February of this year, as reported by PEI.
“We have kept the door open for re-ups and new investors and are giving them more time to get on board,” Polaris managing partner Jan Johan Kuhl told PEI at the time.
The final amount raised includes a GP commitment of 1.5 percent, an increase from the 1 percent the team committed to Fund III, a 2009-vintage vehicle which closed on DKr2.7 billion.
Kuhl said that, in value terms, 68 percent of Fund IV came from existing Polaris investors.
Investors in Fund III include Denmark’s ATP Private Equity Partners, PFA Pension and AP Moller-Maersk Group, France’s Access Capital Partners and the UK’s Alliance Trust Equity Partners, according to PEI data.
The vehicle has already made four acquisitions, announcing its first investment – the acquisition of Danish broadcasting technology provider TRIAX from Nielsen & Nielsen Holdings – in June 2015. Since then it has acquired Danish ferry company Mols-Linien, enterprise software business Configit, and Nordic cosmetic surgery provider Akademikliniken.
“We see very, very high dealflow,” Kuhl told PEI. “But clearly it’s a market where you also need to be careful because it’s also a relatively expensive market.”
Fund IV expects to make 12 to 14 deals, and will look to invest in lower mid-market buyout opportunities in Denmark and Sweden with an enterprise value of €40-€100 million, and in companies with an annual turnover of more than €25 million.
This week Polaris made its sixth exit from Fund III, offloading Swedish collision repair systems producer Car-O-Liner to US listed corporate Snap-on for $155 million. It is understood the deal generated a 4x return.
So far, the six exits and a further partial exit are delivering an internal rate of return of more than 30 percent, it is understood.
Polaris declined to comment on investment performance.
Since the fund’s launch, Polaris has added three professionals to bring its investment team to 14, and adding a part-time financing specialist, Kuhl said.
“We see the financing market evolving, with more opportunities for doing different kinds of [things]. We have done bond-like structures, both listed and unlisted, in addition to normal senior loans and so on, and he’s adding the expertise there. Also to optimise the portfolio as we have it, as well as when we do the deals. So both at entry but also at the portfolio level later.”