Nordic Capital announced the first and final closing of Nordic Capital Evolution II at the hard cap of €2 billion. Raised within four months from launch with excess demand, this fund closed at its hard cap and significantly exceeded its target of €1.4 billion. Evolution II had attracted excess demand from its launch and benefited from strong support from its current investor base, with a high re-up rate of over 100% by capital and significant LP commitments from new investors and geographies, such as a substantial increase from the Americas.
Evolution II is 65% larger than its predecessor fund, Evolution I, which raised €1.2 billion in three months in 2021. It is the fourth Nordic Capital fund since 2020 to benefit from rapid fundraising. The demand for the Fund and the pace of its fundraising underline investors’ confidence in Nordic Capital’s long-standing investment model and portfolio performance.
Nordic Capital’s Evolution strategy expands the firm’s winning subsector model and platform to a broader spectrum of mid-market companies. And Evolution II will target investments predominantly in Northern European companies with an EV of €100 million to €400 and €500 million.
Like its predecessor, the fund will focus on control buyouts and non-cyclical growth opportunities in Nordic Capital’s focus sectors: Healthcare, Technology & Payments, Financial Services and Services, & Industrial Tech. While it will target lower mid-market opportunities, Nordic Capital’s flagship funds will continue focusing on upper mid-market companies.
Nordic Capital is committed to finding and developing non-cyclical companies in fast-growing segments within its well-recognized subsectors. And it works in close partnership with founders and management teams to develop companies with the potential to lead their markets and shape industries. As an Article 8 fund, Evolution II will continue to drive sustainability agendas and seek to promote long-term, environmental, social and good corporate governance practices within the companies it backs.
Nordic Capital has a 35-year history of investing in, growing, and developing mid-market companies. This supports a strong investment pipeline and dealmaking for the Evolution Funds. Evolution I, which was raised in 2021, has completed ten investments to date, of which 70% have been made in collaboration with the companies’ founders and 80% completed outside the broad auction, demonstrating the Evolution strategy’s strong focus on partnership.
A team advises the Evolution Funds of 20+ professionals with a range of tenure and industry experience. The team also draws on Nordic Capital Advisor’s wider organizational capabilities, including its operational and sector-focused expertise and well-established regional network.
Evolution II attracted investors from across the globe, including 41% from Europe, 35% from the Americas, 21% from Asia, and 3% from the Middle East. And the investor base comprises a well-diversified mix of institutional investors: public and private pension funds (c.41%); asset managers and advisers (c.26%); sovereign wealth funds (c.14%); family offices and foundations (c.13%); and financial institutions (c. 6%).
Evolution II will continue Nordic Capital’s strong commitment to sustainability. And this year, Nordic Capital received a top ESG rating from the UNPRI for the second consecutive year. It further advanced its climate agenda with the announcement that the Science Based Target initiative has approved its greenhouse gas emissions reduction targets. Nordic Capital commits to positively contributing to society by backing businesses that are solving some of the world’s global challenges or supporting the development of companies with strong, sustainable foundations.
The fundraising was led by Nordic Capital, supported by Rede Partners who acted as placement agent with Kirkland & Ellis as lead legal counsel.
KEY QUOTES:
“We are delighted to witness such strong demand for Evolution II from both existing and new investors. Their unwavering support is a testament to their confidence in Nordic Capital’s mid-market strategy. Our strong Evolution team, with its clear focus on business growth driven by local market expertise and deep sector knowledge, has cultivated a robust pipeline and secured partnership investments with growth companies within attractive niches. Over the last three years, a number of founders of companies have formed partnerships with Nordic Capital because they have experienced first-hand how we can help make great companies even better and support their expansion into new markets.”
- Joakim Lundvall, Partner and Co-Head of the Evolution advisory team
“With the Evolution funds, Nordic Capital’s long-standing sector strategy is now applied to a wider range of mid-sized companies, offering a partnership model that can help scale and professionalise companies. The partnership model includes both our own expertise, our broad network of experts and a platform that can support growth and international expansion. By contributing experience in product innovation, international expansion and long-term sustainable value creation, Nordic Capital looks forward to helping more mid-market companies develop and reach their full potential.”
- Jonas Agnblad, Partner and Co-Head of the Evolution advisory team
“We are very pleased with the outcome of Evolution II. This is a great achievement for the team, and we would like to express our sincere gratitude to Nordic Capital’s global investor base. This type of result is only possible with the backing of long-standing existing investors as evidenced by the strong reup rate, combined with the confidence gained in Nordic Capital by new investors. We are humbled that investors have prioritised and partnered with Nordic Capital, and we are enthusiastic about working together during Evolution II and beyond.”
- Pär Norberg, Partner and Head of Investor Relations, Nordic Capital Advisors
