Argentum recognised for encouraging investment

Norwegian government-owned investment company Argentum received the Nordic Private Equity Achievement Award at SVCA's conference in Stockholm in September.

Argentum won the award in recognition of its commitment to providing private equity to Nordic funds and encouraging investments in the Nordic region, exemplified by the recent initiative, the Nordic Private Equity Programme (NPEP), where four LPs have committed NOK 7bn to be invested in Nordic funds over the next five years. The syndicate consists of Gjensidige, which has invested with Argentum on several occasions after they bought 30% of Argentum's portfolio in 2005, Varner-Gruppen and ConocoPhillips. The programme will invest in both venture and buyout funds.

The chief networking officer, Maria Borch Helsengreen, who accepted the award on behalf of Argentum, explains why the initiative is important, not only for the private equity industry, but for the economy as a whole: "We want to attract more investors to the industry by sharing our knowledge and experience. Nordic buyout has in the past years performed very well, and the mid-market especially is strong in the region." She highlights increased consolidation and the coming of new brands as trends we will see more of and explains that changes and investment opportunities will continue to arise from the many mature firms in the region, which will benefit from private equity funding and knowledge to grow, as well as generational shifts and more privatisations, especially in the healthcare sector.

"The programme takes Argentum's work a step further. By pooling our resources we obtain economies of scale in fund selection and monitoring, and strengthen our ability to be long term partners to a broader range of Nordic private equity managers," investment manager Espen Langeland expounds. Argentum will lead the consortium, and offer the members insight and access to the investment company's methods of assessing potential funds and its extensive due diligence processes. For example, Argentum employs a team of about seven analysts all involved in management due diligence, investigation of track records and future prospects before a decision is made to invest in a fund. The hope is that the cooperation will not only supply the private equity and venture capital community with financing, but also help develop increased interest and knowledge among potential LPs. With regards to plans for expanding the programme Langeland replies: "There is a possibility to consider new partners if opportunities should arise."

Partnerships on the LP side have been met with varying responses from GPs. Although the general attitude is positive as the trend implies increased funds to the industry, some have raised concerns regarding the level of influence LP syndicates will require with higher stakes in the funds. However, with an influx of foreign investors into Nordic funds, a Nordic LP cooperation seems unlikely to exert undue control. "It is more a standard setting, requiring a certain level of returns and improving knowledge and competence on the LP side," explains Helsengreen, and indeed the Argentum model has proved to be win-win; since its foundation in 2001 the fund has had an average annual return of 35%. It currently has NOK 3.7bn in equity invested in 29 funds. The most recent investments include NOK 200m in Altor's third fund and NOK 290m in Norvestor's Fund V.

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• Topics
• LPs
• Nordics
• Healthcare