Nordic Capital today announced the successful final close of Nordic Capital Fund X (“Fund X” or “the Fund”), at EUR 6.1 billion (including GP commitment of 6.5%). The Fund, launched in April 2020, was oversubscribed at its hard cap, and was raised in less than 6 months in a ground-breaking remote capital raise without holding any face-to-face meetings. This is the largest fund that Nordic Capital has raised since its inception in 1989 and surpasses its 2018-vintage Nordic Capital Fund IX which raised EUR 4.3 billion (including GP commitment).
Investors were attracted to Nordic Capital’s leadership, proprietary sourcing methods and proven track record of creating value through business transformation and solid earnings growth in its focus sectors of Healthcare, Technology & Payments, Financial Services and its selective investments in Industrial & Business Services. Nordic Capital’s strategy of focusing on non-cyclical, growth businesses was validated by the strong performance of the existing portfolio since the COVID-19 pandemic started. In addition, Nordic Capital recently received the highest ESG rating from the UNPRI.
Kristoffer Melinder, Managing Partner, Nordic Capital Advisors, said: “The rapid and successful close of our tenth fund is a significant milestone for Nordic Capital. To close at the hard cap in less than six months during the COVID-19 pandemic is a fantastic achievement that highlights the strength of our LP relationships and the considerable confidence that our blue-chip investors have in Nordic Capital. It is also testament to the strength of our team, proven investment strategy, the portfolio performance and Nordic Capital’s track record. We are grateful for the continued support of existing limited partners and delighted to welcome new investors to the Fund.”
Kristoffer Melinder added: “Nordic Capital’s investment strategy is based on finding growth businesses in our focus sectors where we can use our significant operational expertise and financial firepower to create value and, ultimately, excellent returns for our investors. The economic impact of the COVID-19 pandemic will continue to be felt for some time and the most successful fund managers will be those who respond well to emerging trends and market dynamics to leverage new opportunities. Fund X has a strong pipeline of attractive investment opportunities in our chosen sectors across Europe, and globally for Healthcare. The Fund has already signed its first investment in Siteimprove – a leading software company that supports digital accessibility for people with disabilities.”
Fund X attracted investors from across the globe, with investors from every continent including 38% from North America, 27% Europe, 17% from Asia, 15% from the Middle East and 3% from RoW. The investor base comprises a well-diversified mix of institutional investors: public and private pension funds (c. 49%); sovereign wealth funds (c. 16%); fund of funds (c. 13%); financial institutions (11%); and endowments and family offices (c. 10%). The new Fund expands Nordic Capital’s blue-chip investor base with 34% of commitments deriving from new investors. The re-up rate by capital of Fund IX LPs in Fund X is c. 90%. The Fund also drew significant support from Nordic Capital’s own team, as well as portfolio company management teams and industrial advisors.
Pär Norberg, Head of Investor Relations, Nordic Capital Advisors, said: “We are very grateful for the tremendous investor support. We launched this fund in the middle of a global pandemic, which required investors to completely alter their investment processes to enable remote diligence. The success of the fund raise despite these challenges reflects the investors’ considerable confidence in Nordic Capital’s strategy and team.”
Fund X will be invested across Europe, with a mandate for global investment in Healthcare as in the prior Fund and an emerging smaller global mandate also for Technology & Payments businesses.
Nordic Capital’s proprietary sourcing methods have continued to generate a strong deal pipeline despite the pandemic. It has in 2020, announced two new platform acquisitions: Max Matthiessen in May, a leading financial advisor in the Nordic region and Siteimprove in September, a global leader within website experience and digital marketing optimisation. Furthermore, it has supported several transformative portfolio company add-ons and completed two partial exits. Nordic Capital’s current portfolio companies have on average achieved 10% organic employment growth and an 8% increase in annual sales.
The fundraising was led by Nordic Capital’s in-house Investor Relations team, supported by Rede Partners who acted as global placement agent, Transpacific in Asia, Ameris in South America, with Kirkland & Ellis as lead legal counsel, supported by Carey Olsen in Jersey and Arendt in Luxembourg.