Polaris holds €300m first close on Fund IV

The Copenhagen-based firm is looking to wrap up fundraising before the summer

Polaris Private Equity, a lower-mid market firm operating in Denmark and Sweden, has held a first close on its fourth fund at DKK 2.2 billion (€300 million, $350 million).

Polaris Private Equity IV, which has a €400 million target, held the first close on 1 January 2015 after seven months on the road and is expecting to wrap up fundraising before the summer, according to a source familiar with the matter.

The fund has attracted a mixture of new and existing investors including pension funds, insurance companies as well as family offices, the source added.

Acanthus Advisers is understood to be helping the firm with the fundraising. Both Polaris and Acanthus declined to comment.

Polaris latest fund has the same strategy as the firm’s prior funds. Polaris aims to build value in lower mid-market Danish or Swedish companies through operational improvements, consolidation and pan-Nordic and international expansion. It typically targets businesses with an enterprise value of between €30 million and €150 million.

It’s prior fund, Polaris Private Equity III, a €365 million 2009-vintage, closed its investment period simultaneously with the first close of Fund IV, Polaris said in the statement. The vehicle is understood to be fully invested, but still has capital available for add-on acquisitions.

Polaris I, a €180 million 1999-vintage Danish fund has been fully realised. Fund I generated a gross IRR of 19.9 percent, a net IRR of 16.9 percent and a 2.5x multiple. Polaris II, a €270 million 2005-vintage is fully invested in 10 platform companies in Denmark and Sweden and has completed 16 add-on acquisitions. The fund has room for further add-on investments.

Since its inception in 1998, Polaris has invested in 30 companies, completed around 50 add-on acquisitions and made 14 realisations. The firm’s limited partners include Nordic companies and investors such as A.P. Møller-Mærsk, ATP Private Equity Partners, Danske Bank and Kirk Kapital, as well as international institutional investors such as Pohjola and Alliance Trust, according to its website.

Polaris is not the only firm on the fundraising trail in the Nordics this year. Segulah is currently in market attempting to raise SEK 5.6 billion (€610 million, $810 million) for its Fund V. EQT will be coming to market with its latest fund, which will target approximately €5 billion, later this year, according to PEI’s Research and Analytics division.