Five years after its foundation Altor has successfully held a first and final close of its third fund, Altor Fund III, at its target and hard cap of € 2,000 million, despite somewhat turbulent fundraising markets. Over 50 investors have committed to the fund and ~ 95 % of the fund was raised from existing investors with only a handful of new investors being invited.
Altor Fund III will have the same investment focus on Nordic mid-market investments as its predecessor funds, Altor 2003 Fund and Altor Fund II, a segment where Altor has been the leading investor since its inception in 2003. The investor base includes leading global institutions such as Harvard Management Company, Pantheon Ventures, Skandia Liv, AlpInvest Partners, Goldman Sachs Asset Management, Länsförsäkringar Liv, SL Capital Partners, Allianz Private Equity Partners and Princeton University. Nordic investors represent 28 % of total commitments, other European investors 33 % and US investors the remainder.
“We are extremely satisfied with the support we have received from our existing investors. We view this as a strong endorsement of our active ownership strategy and a consequence of having delivered on our promise to generate superior returns by building world class companies”, commented Harald Mix, Managing partner at Altor Equity Partners. “With the new fund in place and having added some new features, including an extended investment horizon, we are ready to pursue new opportunities in what we believe will be some very attractive years ahead to invest.”
The third Altor fund, which provides for a longer investment horizon and a more flexible and wider investment mandate, is composed of € 1,500 million in base commitments and € 500 million in top-up commitments, which will serve primarily to develop portfolio companies. Altor will continue to focus on making investments in medium-sized Nordic companies with a turnover typically in the region of € 50 to 500 million, a market segment where Altor has been the leading investor since inception.
Altor’s first fund closed in May 2003 with commitments of € 650 million and its second fund closed in February 2006 with commitments of € 1,150 million. The two first funds have completed 24 platform investments and a variety of add-on acquisitions to grow its portfolio companies. Since 2003 Altor has built a strong investment organisation currently consisting of 24 people, with broad international experience, a complementary mix of professional backgrounds and strong representation from all the Nordic countries. The organisation is led by Harald Mix and the other partners are Fredrik Strömholm, Denis Viet-Jacobsen, Hugo Maurstad, Stefan Linder, Claes Ekström, Reynir Indahl, Jaakko Kivinen and Johan Cervin.
“We are pleased with the overall performance of our portfolio companies despite more challenging market conditions. We remain excited about our ability to continue to outperform market returns and we see many interesting opportunities to grow our existing companies and to pursue new opportunities on a selective basis. During the last years, Altor has grown significantly making several important new hires and expanding our Nordic footprint”, said Stefan Linder, partner at Altor Equity Partners.
Monument Group of Boston and London acted as placement advisor on the third fund, and they also advised Altor on the raising of the two previous funds.
On behalf of Monument Group, Martin Anthonsen, Managing Director, commented:
“With Fund III, Altor has once again proven its ability to attract an investor base of the highest quality. Exceptionally strong demand from both existing and potential new investors resulted in the fund being significantly oversubscribed. Additionally, the fundraising process was more expeditious than anticipated in the context of the current challenging fundraising environment. Monument Group is delighted to have now worked together with Altor on three successful fundraisings.”
The fund’s legal adviser was Ashurst LLP, London. On behalf of Ashurst LLP, Piers Warburton said:
“This has been a highly efficient fundraising which has included innovations in fund terms to further align the interests of the GP and LPs.”
Recent Altor activity includes the following transactions:
Acquistion of Åkers, May 2008 – Altor has acquired the Åkers Group. Åkers is the world leader within cast and forged rolls for the steel and aluminium industries. Supported by Altor, Åkers plan to accelerate growth and to secure world class operating efficiency. Altor intends to accelerate the company’s global expansion, particularly in the emerging markets, during the coming years and to reinforce Åkers’ position as global market leader within rolls for the steel industry.
Acquistion of Papyrus, March 2008 – Altor has acquired the paper and packaging merchant Papyrus from Stora Enso. Supported by Altor, Papyrus will be able to pursue additional acquisitions within both existing and new markets as well as within new product areas. The company, with head office in Mölndal, outside Göteborg, Sweden, will continue to be headed by the existing management team. The new owners aim at growing the company during the coming years and develop a European market leader in paper and packaging distribution.
Partial exit of Lindorff to Investor AB, June 2008 – Altor has divested 50 percent of Lindorff to Investor AB at an enterprise value of EUR 1,160 million and has entered into a partnership agreement with Investor for the future development of Lindorff. Lindorff is the leading debt collection company in the Nordic region with a growing European presence.
Altor’s portfolio companies have a combined turnover in excess of EUR 10 billion and in aggregate employ more than 30,000 people. The Altor portfolio companies include ACO Hud (exited August 2004), Dynapac (exited 2007), Aalborg Industries, AGR, ByggMax, Constructor, Dustin, EuroCater, Ferrosan, Helly Hansen, Lindorff (partially exited), Meyn, Navico, Nimbus Boats, Northstar, PaloDex, Papyrus, PIAB, Q-Matic, Relacom, SPT Group, Vatus, Wrist and Åkers.