Chart of the week: Nordic-focused private equity fundraising

 Average fundraising targeting the Nordic region follows a three year cyclical trend


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At the end of June 2015, no capital had been raised for closed-ended private equity funds targeting investments in the Nordic countries. In 2014, $3.57 billion was raised from the close of seven vehicles investing into the region, equating to an average fund size of $509.94 million. Since 2008, average fundraising focused on the Nordic countries has followed a three year cyclical trend. The lowest points in the average fundraising cycle between 2008 and H1 2015 came in 2009 and 2012, with $112.95 million and $169.33 million raised on average by funds respectively. If the pattern continues, 2015 is expected to be a low year in the cycle. A lack of Nordic-focused vehicle closes in 2015 so far suggests that this will be the case by year end.

High points in the average fundraising cycle for Nordic vehicles came in 2008, 2011, and 2014. In two of these years – 2008 and 2014 – Altor Equity Partners was the GP that raised the largest fund focused on the region. Altor Fund III gathered $2.92 billion from investors in 2008, while $2.63 billion was raised by Altor Fund IV in 2014. Such a small market – with nine the highest number of vehicles closed per year over the time period – is likely to be skewed by one or two large fundraises. The presence of fund managers such as Altor Equity Partners and Dansk Vaekst Kapital closing large vehicles in these peak years may therefore explain the cyclical nature of average fundraising focused on the region.

Currently on the road, there are nine Nordic-focused private equity funds with a collective target size of $852.48 million. Erhvervsinvest III K/S managed by Erhvervsinvest Management A/S is the largest of these. The buyout vehicle is targeting $148.16 million to invest into Denmark.