Nordea raises E176m for fund invest

12 July 2005

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Nordea Private Equity has launched the global fund-of-fund, Nordea Private Equity II, which has already raised E176m. The Danish LP has a target of E300m, and was launched December 2004. The fund is structured with a 12-year lifespan and a two-year extension. Depending on commitment, the management fee is up to 1% for the minimum subscriptions of E1m; and 0.5% for investors committing more than E50m. Those investing more than E15m will not be charged a management fee before the fund has committed to portfolio funds. There is a sponsor investment of E10m, and the carried interest payments are returned on a 'fund as a whole' basis. Nordea Private Equity II is a customised product in terms of conditions, and carry, floor, cap and hurdle differ between secondaries and primaries and sub asset classed as European mid-market, special situations and so on. Both 50-50 catch-up mechanisms and an undisclosed clawback provision are in place. Closed in 2001, Nordea Private Equity's fund, Vintage 2001, has until now realised an IRR of 50%, and made a 2x return on realised investment. According to managing partner Lauge Sletting, it generated a total realised and unrealised IRR of 12% (estimated for 30 June 2005). Several Nordic pension funds and corporate investors have committed to the fund, including a leading Swedish public pension buffer-fund. The cornerstone investor is Nordea.Nordea Private Equity II has a customised structure offered in more than three different LP vehicles. One will focus on global private equity funds, one on European mid-market funds and a third on Nordic secondaries funds. The fund also has provision for a separate special situation vehicle. Typically, an investment in a buyout fund will be between E10-25m, and in a venture fund E5-10m. The fund has already made six investments, five globally and one in a European mid-market fund. Part of Nordea Investment Management, Nordea Private Equity employs eight people dedicated to private equity: two senior partners, two principles, two associates, one legal partner and one CFO. In addition, plans are made to recruit one more senior partner. Lauge Sletting and Jan RÃ¥dberg, both with 20 years of investment experience, will be the main managers of Nordea Private Equity II.