#Private Equity #Luxembourg #Nordic Capital #Evolution II

Nordic Capital's Evolution II Fund Achieves Remarkable Success

Nordic Capital has announced the remarkable achievement of closing its second mid-market fund, Evolution II, at a hard cap of EUR 2 billion. This successful closure occurred within just four months from its launch, which is a testament to the robust demand and support from a globally diversified investor base. The fund not only reached its target of EUR 1.4 billion but significantly exceeded this goal, making Evolution II approximately 65% larger than its predecessor, Evolution I, which raised EUR 1.2 billion in three months back in 2021.

Strong Investor Confidence

The rapid fundraise can be attributed largely to the confidence investors have in Nordic Capital's long-standing investment model, bolstered by its impressive portfolio performance. A noteworthy aspect of this fundraising was the high re-up rate of over 100% from existing investors, alongside substantial commitments from new limited partners (LPs) across different geographies, notably a significant increase in participation from the Americas.

Nordic Capital's focus on subsector specialization and a mid-market investment strategy in Northern Europe has proven appealing, as it aims to identify and partner with growth companies to enhance long-term growth trajectories.

Evolution II’s Investment Focus

With a clear roadmap in place, Evolution II is set to target investments predominantly within Northern European companies valued between EUR 100 million and EUR 500 million. The fund's strategy will mirror that of its predecessor, with a strong emphasis on control buyouts and exploiting non-cyclical growth opportunities. Key sectors of interest for Evolution II include Healthcare, Technology & Payments, Financial Services, and Industrial Tech.

While the focus remains on lower mid-market opportunities, Nordic Capital's flagship funds will continue to explore upper mid-market segments, allowing for a complementary approach across various investment levels.

A Commitment to Sustainable Growth

As an Article 8 fund, Evolution II is dedicated to driving sustainability initiatives and promoting sound environmental, social, and governance (ESG) principles within the companies it supports. Nordic Capital's commitment to sustainable investment practices was recognized by a top ESG rating from the UN PRI for the second consecutive year, along with the approval of greenhouse gas emissions reduction targets by the Science Based Target initiative.

Experts at Nordic Capital, including Joakim Lundvall and Jonas Agnblad, emphasized the importance of strong partnerships with company founders and management teams, which have been a cornerstone of the firm’s strategy. Joakim Lundvall remarked on the overwhelming demand from investors, highlighting the effectiveness of their local market expertise and sector knowledge in cultivating attractive investment opportunities.

A Robust Investor Base

The Evolution II fund attracted a well-diversified mix of global investors, comprising approximately 41% from Europe, 35% from the Americas, 21% from Asia, and 3% from the Middle East. The investor base includes a variety of institutional investors such as public and private pension funds (c. 41%), asset managers (c. 26%), sovereign wealth funds (c. 14%), and family offices (c. 13%).

Pär Norberg, Partner and Head of Investor Relations, expressed gratitude towards the investor community for their support, emphasizing that the strong reup rate reflects their ongoing confidence in Nordic Capital’s strategies. The firm is set to leverage its extensive operational and sector-focused expertise, with a dedicated advisory team of over 20 professionals to ensure successful execution of the Evolution strategy and to foster growth in mid-market companies.

Nordic Capital believes that by partnering with growth companies that tackle contemporary global challenges, they can contribute positively to society and generate sustainable returns for investors.

Conclusion

Overall, the successful closing of the Evolution II fund marks a significant milestone in Nordic Capital's history, reaffirming its position as a leading player in the private equity landscape and its commitment to sustainable investment practices. The fund aims not only to drive financial growth but also to make a lasting impact through responsible investing and strategic partnerships with innovative companies.