Nordic Mezzanine to hold off on new fund, says CEO

"We are not winding down, but we are not currently looking to raise another fund," Nordic Mezzanine CEO Vesa Suurmunne told unquote". "We may return to the market at some time in the future, depending on the market."

No fundraising efforts were set in motion to raise a fourth Nordic Mezzanine fund, including the application for an AIFMD passport, as the manager decided to wait for a more attractive market situation and decide on the firm's next step.

"We took some soundings of the market and the feeling is that the position of traditional mezzanine providers is somewhat squeezed on the deal side at the moment," Suurmunne said. "The pressure has mainly been coming from direct lending funds and banks in the Nordic area, which are currently very aggressive compared to those in continental Europe."

The manager's immediate focus will be to work with its existing portfolio, which consists of around 14 companies across two funds. "It will take another five or six years to manage those, so we are working on our portfolio and getting the best possible returns for our investors," said Suurmunne. "We've got five investments in the second fund and nine investments in the third fund, where we did the last investment last year. Performance seems very good, but it's a combination of many things that has resulted in us not going to market with a traditional mezzanine product."

Nordic Mezzanine's latest deal was in March 2015, participating as the debt lead in the SBO of former Stora Enso subsidiary Kotkamills by a group of investors led by MB Funds. Suurmunne said his firm is sitting on dry powder for add-on investments and is looking to provide additional capital for its existing portfolio companies in the future.

"Nordic Mezzanine is maintaining the organisation and we are not disappearing anywhere," he added.

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• Topics
• Fundraising
• GPs
• Mezzanine
• Nordics
• Mezzanine
• Finland