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Nordic Capital takes pandemic fundraising past €7.3bn with first mid-market Evolution Fund

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Nordic Capital has taken its pandemic fundraising to more than €7.3bn through the final close of its first mid-market Evolution Fund.

The European buyout house took just three months to close the fund on a little over €1.2bn, with Nordic saying the vehicle had already attracted excess demand at the time of its launch. It includes a sizeable 6.8% GP commitment.

Last October Nordic soared to a €6.1bn hard cap final close for its biggest ever flagship fund, taking just six months to raise the vehicle remotely due to the coronavirus crisis.

The firm soared past its €5bn goal for Nordic Capital Fund X, which it launched in April at the height of the pandemic in the UK to date.

The Evolution Fund will target smaller-scale deals than Fund X, eyeing equity investments across Northern Europe of between €35m and €150m in mid-market companies with an EV of €50m to €300m.

Nordic said the fund would closely replicate the firm’s established strategy of targeting non-cyclical growth opportunities within the healthcare, technology and payments and financial services sectors.

The firm said it completed the Evolution Fund’s first deal in April with the buyout of Boost.ai, a provider of conversational AI for Fortune 1000 companies.

Kristoffer Melinder, managing partner at Nordic Capital Advisors, said, “The Evolution Fund builds on Nordic Capital’s long heritage in the mid-market.

“It enables us to apply our experience and our value creation thesis to a wider size range of mid-market companies, with the aim of supporting the evolution of companies at different stages of their growth journeys.”

Pär Norberg, head of investor relations at Nordic Capital Advisors, added, “We are very pleased to have seen such strong demand for the Evolution Fund from existing and new investors, and are as always grateful for their support.

“This demand and the speed of the fundraise underlines investor confidence in Nordic Capital’s proven investment model and expert team, as well as their recognition that the Evolution Fund is a very natural extension of that winning combination.”

Nordic said 57% of Fund VII backers were from Europe, 19% from Asia, 19% from North America, and 5% from the Middle East.

About 40% were asset managers and advisers, 30% public and private pension funds, 20% sovereign wealth funds and 10% endowments and family offices.

Rede Partners who acted as placement agent for the raise, with Kirkland & Ellis as lead legal counsel, supported by Carey Olsen and Arendt & Medernach.

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