GP Profile: Adelis steps up deal-making after latest fund close

Nordic mid-market private equity firm Adelis Equity Partners announced the final close of its EUR 932m third fund last week, as reported.

"We were planning for and expecting a fully virtual process," says Adalbjörn Stefansson, head of investor relations at Adelis. "The formal launch was not until 1 September, but we interacted with LPs a few months before. Scheduling meetings is a lot easier virtually and for the LPs who had met us already, it worked fine."

"We had a 100% re-up rate, which helped," adds co-managing partner Jan Åkesson. "And the select few new investors were invitation only – speaking to them virtually worked smoothly as well."

 

The fund's LPs include European and US pension funds, foundations and funds-of-funds. According to its website, pension funds make up 54% of its investor base, while foundation and endowments comprise 26%, and funds-of-funds make up a further 20%.

Adalbjorn Stefansson, Adelis Equity Partners

"The new LPs are similar to those we already had and continue to be high-quality long-term institutional investors," says Stefansson. "We did want to increase our exposure in the US and select European markets where we felt we needed additional coverage."

Fund III is significantly larger than its 2017-vintage predecessor, which held a final close in June 2017 on EUR 600m. "We could have raised more but we did not, since we want to stay in our segment and keep doing what we have been doing, and we can stay there easily with our new fund," says Åkesson of the larger fund volume. "We will make a few more investments and a few more of these will be at the upper end of our equity tickets."

Adelis's debut fund made 14 platform deals. Fund II is likely to make up to 17 deals at full deployment, and Fund III is expected to make 15-20 platform deals, given its increased size.

The GP expects to make its first deal from Fund III in H1 2022, once the final investments have been made from Fund II. "We are currently in a very active period for new entries and exits," says Åkesson. "Some of this is directly related to where we are post-Covid – we have had a super active H2 2021 in the Nordic region, so we are working on multiple new investments, as well as a few exits."

Tapping the source
Adelis has developed its deal-sourcing network and opportunities over its successive fund generations. "We make partnerships with entrepreneurs who are selling their businesses and our reputation has grown," Åkesson says. "We have added to our team and now have pan-Nordic coverage, including senior deal-makers. What is different now compared with our previous fund is we have a much broader scope of deal sourcing, while still honing in on our key sectors."

Adelis targets companies with enterprise values of EUR 25m-250m and with revenues of EUR 10m-300m, deploying equity tickets of EUR 20m-100m. Its key sectors are business services, technology services and software, and health and life sciences.

The GP generally sources its deals via bilateral relationships, often partnering with founders in primary buyouts. "We have been successful in acquiring companies from founders, groups of entrepreneurs, and families who want to reinvest," says Åkesson. "Of all the processes we have done, 40% have been bilateral and we have only made three SBOs so far."

Adelis has made eight full exits plus one IPO to date. Five of its exits so far have been via SBOs, according to Unquote Data. One further portfolio company tipped for an IPO is Ropo Capital; Finnish publication Kauppalehti reported in October 2021 that the invoicing life cycle provider could list following continued geographical expansion. Åkesson and Stefansson declined to comment on this.

Stockholm-headquartered Adelis was founded in 2012 by former Triton executive Åkesson and former 3i Nordic chairman Gustav Bard. Two further former 3i executives, Johan Seger and Steffen Thomsen, subsequently joined the team. In addition to its headquarters in Sweden, the firm also has an office in Copenhagen.

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