2011-vintage funds: what is still in Nordic portfolios

Below is a select list of Nordic-based firms that are still managing funds with a 2011 vintage. Mergermarket and Unquote have highlighted portfolio companies from these funds for which no deal has been publicly disclosed and that could come to market.

2011-vintage Nordic funds

Heartcore Capital (formerly Sunstone Capital)
Description: Consumer-tech focused firm investing across Europe and occasionally in the US.
Sunstone Technology Ventures Fund III raised €85m in December 2011 and is backed by Dansk Vækstkapital, the European Investment Fund and Vaekstfonden, according to Unquote Data. 

VNT Management
Description: Venture capital firm focused on clean technologies, particularly energy savings, electrical systems and renewables in Europe.
Power Fund III has a 10 year-lifespan, as per Unquote Data. It is backed by LPs including the European Investment Fund, The Growth Fund of Finland and Varma Mutual Pension Insurance Company. It invested in six companies, of which two are exited.

NorthCap Partners
Description: Seed- to growth-stage investor focused on B2B and B2B2C information and communication technology startups in northern Europe.
NorthCap Partners Fund III invested in companies in information and communication technology sectors with turnovers of DKK 5-50m. It is backed by the European Investment Fund and Vaekstfonden. It invested in five Denmark-based companies, of which two are exited.

EQT Partners
Description: Private equity firm investing across multiple sectors, geographies and strategies. It has 19 active funds and €40bn in assets under management.
EQT VI has a regional focus on northern and eastern Europe. Its major investors include Pictet Alternative Advisors, Abu Dhabi Investment Authority and Freemont Management, as per Unquote Data. The fund has made 19 investments, of which eight are exited and four are partially exited.

 
The slow period of economic recovery after the global financial crisis (GFC) resulted in prolonged holding periods, increasing gradually and reaching a peak in 2013, according to Unquote Data. Over that period, the percentage of companies exited in less than five years started to plummet; the average holding period for PE portfolio companies sold in 2013 stood at around 6.5 years.

With the twin impact of a macroeconomic cycle reaching its peak and the inevitable fallout from the Covid-19 outbreak, private equity investors may face a similar challenge. European exit volume fell sharply in Q2 (-43% year-on-year) according to Unquote Data, and the drop was even more pronounced in the Nordic region (-55%). A number of market players anticipate that the outbreak and more importantly its aftermath could add anywhere from six to 18 months to exit timetables for sponsors.

As previously discussed, managers have a couple of options available to them when funds near the end of their lifespan and the traditional exit routes of IPOs and M&A dry up. The most obvious is that funds exceeding their 10-year lifespan will look to activate extensions. Standard fund extensions are usually baked into the LP agreement and often include two one-year extensions. These are expected to be granted without much difficulty (as they were during the GFC) given that LPs will have a keen interest in protecting their called capital.

The other is the secondaries market, specifically GP-led transactions such as single-asset restructurings and continuation vehicles, allowing LPs to recoup liquidity if needed and awarding GPs with more time and financial leeway to keep supporting ageing portfolios. A landmark deal of that type was inked in the Nordic region back in 2018, when Nordic Capital completed the transfer of the remaining nine portfolio companies from its seventh fund to a continuation vehicle, Nordic Capital CV1. Coller Capital acted as lead investor in the €2.5bn transaction, with assets transferred including Binding Site, Sunrise Medical, Acino, Bladt Industries, Britax, Ellos Group, Itiviti/Ullink, Master Marine and Sport Nordic Group.

EQT itself has turned to the secondaries market in recent years, notably with a stapled deal for its 2011-vintage EQT VI flagship, although the rationale for that deal was to offer liquidity to existing LPs and allow Partners Group to increase its exposure to both EQT VI and EQT Mid-Market Asia III.

by Rosa Dsouza and Greg Gille, with analytics by Mate Taczman

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Investments
• Nordics
• GPs
• Norway
• Sweden
• Denmark
• Finland
• EQT