Polaris returns DKK 1.5bn to investors

The lower mid-market firm targeting opportunities in Denmark and Sweden is “more in development mode” following the exit of five investments over the past 15 months, Polaris managing partner Jan Johan Kohl tells Private Equity International.

Polaris Private Equity, a lower mid-market firm focused on Denmark and Sweden, has returned DKK 1.5 billion ($218 million; €201 million) to investors over the past 15 months, it is understood.

The firm has made five exits during the period, including the sale this week of its 75 percent stake in online DIY retailer Skånska Byggvaror to building product retailer Byggmax. Byggmax paid SEK 741 million ($85.8 million; €79 million) for the entire company.

Based on the performance of the company in 2016, Polaris may receive a further SEK 110 million from the transaction, which is understood to have generated a 5x return for investors in Polaris’ 2009-vintage third fund.

The €365 million fund has just begun the realisation cycle, Polaris managing partner Jan Johan Kohl told Private Equity International.

The firm’s stake in Skånska Byggvaror, acquired in 2012, and its investment in brand design product maker A-Tex, made the same year, were exited in a short period because the firm has been “very successful in getting them to grow fast and deliver ahead of the plan,” Kohl said.

Other exits include the sale of its 55 percent stake in animal feed company Hamlet Protein in June to Altor and Goldman Sachs Merchant Banking Division, as reported by PEI. The investment was made through Polaris Private Equity II, a 2005-vintage vehicle, and generated a 4x return.

Polaris has also realised its 2011 investment in mining contractor Bergteamet, and its investment in IT security company AddPro, which it sold after nine years to German private equity firm Perusa.

Kohl described its existing portfolio of 13 investments as “young”.

“We are more in development mode. There will be opportunities here and there for exits but we are not pushing hard.”

The firm is expecting to reach a final close on its fourth fund around New Year, Kohl said. Polaris Private Equity IV has already reached its €400 million target, as reported by PEI.

The fund announced its first investment in June, the acquisition of Danish broadcasting technology provider TRIAX A/S from Nielsen & Nielsen Holdings. It has also invested in Danish ferry company Mols-Linien.

The firm has €1 billion in assets under management in three active funds.