Procuritas, the Scandinavian buyout firm based in Sweden and Denmark, has held a final close of its third fund, Procuritas Capital Investors III, on E230m, E70m below its original target of E300m. The firm closed the fund in April this year.
The fund received commitments from a group of international investors including Verizon, Statoil, Nordea Group and Sampo.
In keeping with its long-standing investment strategy, the PCI III will invest in mid-market buyouts across the Nordic region, where the firm believes the market is less competitive than at the large-cap buyout end. PCI III, 2.5 times bigger than its predecessor, will primarily invest in mid-sized Scandinavian companies with sales between E50m-200m.
A spokesperson for the firm said the fund had failed to reach its original target due to the broader downturn in the market. The shortfall contrasts with Altor, the Swedish private equity firm set up by Industri Kapital co-founder Harald Mix, which closed ahead of target on E650m earlier this month.
The first fund, PMIC, established in 1990, produced a 74 per cent net IRR to investors, according to the company website. Procuritas Capital Partners II was raised in 1997 with a capital base of SKr963m (E106m). PCP II was backed by 19 Scandinavian and international investors with management committing seven per cent of the capital.
The target performance for the latest fund is two to three times invested capital, with management contributing around five per cent. Procuritas reports that IRR for Procuritas funds since 1990 is 67 per cent net to investors.
Procuritas chief investment officer Lars Krogsgaard said the market in the Nordic region remained challenging because of the gap in valuations. “There is still a difference in the value perception between buyers and vendors which is making it difficult to complete deals, although we are seeing a lot of interesting opportunities.”
Procuritas manages private equity capital in excess of SKr3bn (E330m) for regional and global institutional investors. Procuritas was established in 1986 as the first dedicated management buyout firm in the Nordic region.