Altor has in record time closed its fourth fund, Altor Fund IV, at its target and hard cap of EUR 2,000 million, with significant additional interest from investors. Altor maintains its focus on developing mid-market companies in the Nordic region. The fund will be domiciled in Stockholm, Sweden.
The vast majority of the capital has been committed by existing investors, with only a select group of new investors being invited. The investor base consists mainly of US university endowments, charitable foundations and pension funds. Nordic investors represent 20% of total commitments, with the remaining capital coming from the US, Europe, Middle East and Asia.
Altor’s previous funds have generated 20% annual net returns on average since inception 2003. All three Altor funds have generated top quartile returns, which puts Altor among only a handful of funds globally based on the consistency of its returns.
“During the past year Altor has successfully realized four investments, including OW Bunker, Max Matthissen, Eurocater and Byggmax.” commented Harald Mix, Partner at Altor. “The returns have been very strong, equally important all these companies have found new owners who will be able to further develop these businesses in the future.”
The new fund will similar to the prior fund have a 15 year term. The extended term allows Altor to invest in companies where a longer investment horizon is warranted. Among Altor’s current portfolio companies, there are a few companies that have been owned for almost 10 years, among those Lindorff, Navico and Dustin. The main investments are made in private companies with revenues typically in the region of EUR 50 to 500 million. The new fund also has a flexible investment mandate, which allows for minority investments in publicly traded companies and distressed debt. The overall ambition remains the same as for all previous Altor funds, to create value and generate superior returns by building world-class companies.
The new fund will have its legal domicile in Sweden and be regulated as an AIFM entity (Alternative Investment Fund Manager) by the Swedish Financial Supervisory Authority.
“Discussions and media attention around tax planning and offshore tax havens are not very productive. We would rather spend our time and effort on developing successful companies together with strong management teams and successful entrepreneurs.” Mr Mix continues. “Private Equity as a governance model represent a larger share of the overall economy in the Nordics than in most other regions in Europe. Providing Increased transparency and adopting to a regulated environment will hopefully create a better overall understanding and knowledge of Private Equity as a successful ownership model.
“The fund was closed in less than three months, with demand levels as strong as anything we have seen in our 20 year history.” said Laurence Zage, Managing Director at Monument Group, which advised Altor on the fundraising. “It is a real endorsement of Altor and of private equity in the Nordic region, from a sophisticated group of local and international investors, who tell us they regard Altor as trustworthy, transparent and one of the strongest performing managers in their portfolios globally.”
“By adopting an onshore regulated structure for its new fund, Altor has shown its ability to evolve its business to reflect a changing environment” said Piers Warburton, funds partner at Ashurst LLP, “and the success and speed of the fund-raising clearly demonstrates its investors’ commitment to the Altor model.”
The board of the new fund will be formed by Hannu Ryöppönen as Chairman and Ulrika Werdelin, Hans Henrik Klouman and Cecilia Lager as Board members. Hannu Ryöppönen and Ulrika Werdelin also serve on the Boards of Altor’s previous funds. The Board members all have long experience from the Nordic and international business community as well as experience from working in a regulated environment.
Altor and the Fund have been advised by the following:
Placement Agent: Monument Group,
Legal: Ashurst LLP; Mannheimer Swartling Advokatbyrå AB (Sweden); Ropes & Gray LLP (US)
Regulatory: Gernandt & Danielsson Advokatbyrå AB
Tax and Audit: PricewaterhouseCoopers AB
Administration and Depositary: Aztec Group
For more information:
Harald Mix, Partner Altor: tel +468 678 91 00
Tor Krusell, Head of Communications Altor: tel. +4670 543 8747
Since inception, the family of Altor funds have raised some EUR 5,8 billion in total commitments. The funds have invested in excess of more than EUR 3.1 billion in more than 40 companies. The investments have been made in medium sized Nordiccompanies with the aim to create value through growth initiatives and operational improvements. The aggregated turnover of the current portfolio companies is more than EUR 20 billion and the companies have more than 30 000 employees. Among current and past investments are Apotek Hjärtat, Carnegie, Lindorff, EWOS, Wrist Group, Dustin and Byggmax. altor.com