IK closes ninth-generation fund on €2.85bn

Katharine Hidalgo
29 May 2020

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IK Investment Partners has closed its IK IX mid-cap investment vehicle on тЌ2.85bn.

The fund was registered in February 2019 with a €2.5bn target. It held a first close on €1.85bn in May 2019. The fund is a Luxembourg SCA, though the firm is based in London.

The fund has a 10-year term, with a five-year investment period and European style carry waterfall structure.

A spokesperson for the firm said: "The fund was already oversubscribed by December 2019, but we encountered some market disruption due to coronavirus, which stretched out the timeline."

The predecessor vehicle, IK VIII, held a final close in November 2016 on €1.85bn and had deployed 87% of its capital as of December 2019, generating a Net IRR of 10%.

Kirkland & Ellis acted as the legal counsel.

Investors
LPs in the fund include Aberdeen Standards Investments, the European Investment Fund, ICG Enterprise Trust and Illinois Municipal Retirement Fund, with tickets of €50m or less. The New York State Common Retirement Fund and the Minnesota State Board of Investment provided tickets of €200m and €135m respectively, according to Unquote Data.

The GP commitment to the fund was €75m.

LPs in the fund's predecessor include Banque Pictet with a €111m investment and SVG Capita with an €115m investment.

The fundraise attracted participation from an institutional investor base across Europe, representing 60%, North America (30%), Asia (7%) and South America (3%), with more than a third of the money, more than €1bn, raised coming from limited partners investing in IK funds for the first time.

Investments
The fund will invest in around 18 companies with enterprise values of €100-500m, investing equity of €50-150m.

It has yet to make any investments. The spokesperson said: "We are continuously assessing the market, but we do not anticipate any investments until late Q3 or Q4 of this year."

IK IX will continue to invest across the Nordic region, the DACH region, France and Benelux. Its strategy of investing in mid-market businesses in the business services, consumer, food, engineered products and healthcare sectors remains the same.

People
IK Investment Partners – Christopher Masek (CEO); Mads Ryum Larsen (head of IR, managing partner).