Three veterans of the Nordic buyout industry have broken away from their former firms - Altor and Nordic Capital - to found small- and lower-mid-cap GP Summa Equity.
To date, new firm Summa has completed two buyouts – Sortera and eGain – with capital raised on a deal-by-deal basis, according to co-founder and former Altor partner Reynir Indahl. Though Indahl would not comment on any fundraising efforts, a source close to the matter said the new GP is looking to raise a €300m fund with a classic buyout structure. Summa will look to invest in buy-and-build cases, taking stakes of 80% or more and committing equity tickets in the €20-50m range. The equity size of the Sortera and eGain buyouts were roughly in the middle of the GP's range.
Indahl said the new GP will have a thematic focus, making investments in companies with growth in excess of the general economy's, and business models driven by resource scarcity, energy efficiency or changing demographic trends, with a data and digital angle. The firm's two existing portfolio companies fit the first two themes: waste management and recycling company Sortera's business is based on resource scarcity, while, eGain is a "big data"-driven energy monitoring and control systems producer, which fits with Summa's energy efficiency remit.
Indahl cites the global struggle for growth, with the IMF and World Bank lowering economic growth prospects, as well as an ageing demographic in the West, growing world population and climate challenges as drivers of strong growth in the special niche industries Summa will target.
The firm's strategy will differentiate itself from its Nordic competitors in the small- and mid-cap spaces by its sectoral approach and pan-Nordic investment strategy, in a space where most funds are generalist players with a single-country focus, Indahl said.
Summa's choice to play in the lower end of the market was in part a result of the limited opportunities there would be in the mid-to-large bracket, given the firm's sectoral strategy.
The firm was founded earlier in 2016, after Indahl left Altor in January to found the buyout house alongside Altor colleague Johannes Lien and Nordic Capital chief counsel Jenny Keisu. In addition to the three buyout professionals, the team has been expanded to include former Swedbank associate Hannah Jacobsen.
Summa will have offices in Stockholm and Oslo and Indahl said the firm is looking to grow its team further.
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