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Danske private equity business aims to raise EUR600m for fourth fund of funds

Danske Private Equity has launched fundraising for Danske Private Equity Partners IV, its fourth fund of private equity funds, which will focus on small and mid-market buyouts in Western E

Danske Private Equity has launched fundraising for Danske Private Equity Partners IV, its fourth fund of private equity funds, which will focus on small and mid-market buyouts in Western Europe and North America. The fund contains US dollar- and euro-denominated modules and is targeting commitments totalling EUR600m.

Danske says that while private equity funds have consistently displayed a capacity for generating attractive long-term returns, the market has also been characterised by a high variance in returns between top and bottom performers.

The firm argues that private equity fund investments can generate attractive returns if a highly targeted and selective ‘fund-picking’ approach is applied.

Danske Private Equity Partners IV will seek to invest in privately held small and mid-sized companies through a portfolio of small and mid-market buyout funds in North America and Europe. It believes that small and mid-sized companies offer scope for significant strategic and operating improvements, and that inefficiencies exist in the market for such companies.

The firm says the mid-market buyout segment has generated the highest performance of any private equity categories over horizons of both 10 and 20 years, with net internal rates of return of 22 per cent and 18 per cent respectively.

By comparison, Danske says, the venture capital asset class has a particularly low average performance, primarily caused by a significantly higher loss ratio than that of the buyout market as a whole.

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