Nordic Capital has held the first and final close of its first Evolution Fund at just over EUR1.2 billion (including GP commitment of 6.8 million per cent). Launched in April 2021 and raised in only three months, the Fund was substantially oversubscribed at its hard cap and significantly exceeded its target.
With the Evolution Fund, Nordic Capital will build on its long and successful investment experience in the mid-market, applying its value creation model to a broader size range of mid-market companies in its selected sectors and geographies, leveraging its own expertise and extensive expert networks.
Focusing on control buyouts, the new Fund will target equity investments across Northern Europe of between EUR35 million and EUR150 million in mid-market companies with an EV of EUR50 million to EUR300 million. It will closely replicate Nordic Capital’s established and successful strategy focusing on non-cyclical growth opportunities within the Healthcare, Technology & Payments and Financial Services sectors.
The Evolution Fund will also continue Nordic Capital’s strong ESG focus, where Nordic Capital has received the highest ESG rating from the UNPRI. With a clear commitment to making a positive contribution to society by helping to build strong sustainable companies, the Fund will promote environmental, social, and good governance practices, among other objectives.
The new Fund is advised by a dedicated team, led by Joakim Lundvall, Partner, Nordic Capital Advisors, and comprises a mix of experienced investment professionals from Nordic Capital Advisors and seven newly recruited team members. The team will also draw on Nordic Capital Advisor’s wider organisational offerings, including its operational and sector focused expertise and well-established regional network.
Nordic Capital has a strong 30-year history of investing in and successfully growing and developing mid-market companies. This, combined with its focus on attractive niches where it is well embedded, means that the new Fund already has a strong deal pipeline. The first portfolio company in the Evolution Fund will be Boost.ai, a global leader in conversational AI for Fortune 1000 companies, an investment completed by Nordic Capital in April 2021.
Kristoffer Melinder, Managing Partner, Nordic Capital Advisors, says: “The Evolution Fund builds on Nordic Capital’s long heritage in the mid-market. It enables us to apply our experience and our value creation thesis to a wider size range of mid-market companies, with the aim of supporting the evolution of companies at different stages of their growth journeys. Nordic Capital is committed to finding and developing winning companies in the most compelling sub-sectors in Europe. We are also committed to our own evolution as an organisation. This includes driving sustainability agendas and to promote long-term, best in class environmental, social, and good governance practices.”
Joakim Lundvall, Partner, Nordic Capital Advisors, who leads the Evolution Fund advisory team, says: “We have created a strong team that will work with the wider Nordic Capital sector organisation to focus on mid-market investments. We have a clear focus on business growth driven by local market expertise and deep sector knowledge and with the addition of the Evolution Fund, we can now apply this to a broader spectrum of mid-market companies in Northern Europe. We have already established a strong pipeline of compelling investment opportunities across Nordic Capital’s target sectors and geographies.”
Pär Norberg, Head of Investor Relations, Nordic Capital Advisors, says: “We are very pleased to have seen such strong demand for the Evolution Fund from existing and new investors, and are as always grateful for their support. This demand and the speed of the fundraise underlines investor confidence in Nordic Capital’s proven investment model and expert team, as well as their recognition that the Evolution Fund is a very natural extension of that winning combination.”
Nordic Capital’s Evolution Fund attracted excess demand at launch, including strong support from its current investor base and with a significant waitlist of interested investors.
Nordic Capital Evolution attracted investors from across the globe, including 57 per cent from Europe, 19 per cent from Asia, 19 per cent from North America, and 5 per cent from the Middle East. The investor base comprises a well-diversified mix of institutional investors: asset managers and advisers (c40); public and private pension funds (c.30 per cent); sovereign wealth funds (c20 per cent) and endowments and family offices (c10 per cent).
The fundraising was led by Nordic Capital, supported by Rede Partners who acted as placement agent, with Kirkland & Ellis as lead legal counsel, supported by Carey Olsen and Arendt & Medernach. The closing of the Evolution Fund comes only nine months after Nordic Capital closed Fund X at EUR6.1 billion after a six-month remote fundraising.