Nordic Capital, a Swedish buyout firm specializing in Scandinavian and German-speaking countries, is asking for as much as six more months to complete capital raising as it seeks to gather 3 billion ($3.9 billion) euros for its latest fund, according to a letter to clients.
The firm, based in Stockholm, wants the fundraising deadline for Nordic Capital Fund VIII LP to be extended to Feb. 8 from this August as a number of prospective clients need time to finish their investment committee and legal processes, according to the letter, a copy of which was obtained by Bloomberg News. The firm will probably wrap up capital raising by September, according to a person briefed on the process who asked not to be identified because the information isn’t public.
Private-equity firms are taking longer than in the past to amass capital as they compete for a limited pool of investor cash. Managers now need an average of 18 months to raise funds, compared with about 14 months in 2008, according to London-based data provider Preqin Ltd. Apax Partners LLP took 15 months to line up 5.8 billion euros for its latest buyout fund, which closed earlier this month. Another European private-equity firm, Cinven LLP, raised 5.3 billion euros in June after starting fundraising in 2011.
Katarina Janerud, a spokeswoman for Nordic Capital, declined to comment on the fundraising process.
Nordic Capital, which started pitching its fund in April 2012, held a 1.7-billion euro first close in February. The fund has gathered “substantial further commitments since then” and has “a significant number of investors in progress,” according to the letter. Nordic Capital told investors last year it would seek 25 percent less than the 4 billion euros it originally targeted for the eighth fund, people with knowledge of the matter said in October.
The firm raised 4.3 billion euros for the prior fund in 2008. Nordic Capital Fund VII LP was generating a multiple of 1.1 times invested capital and a 4 percent net internal rate of return as of Dec. 31, according to performance data by Washington State Investment Board.
Nordic Capital today agreed to sell Danish information-technology company EG A/S to Axcel A/S, another private-equity firm, an exit that will make it four times its investment, said a person with knowledge of the matter.
Nordic Capital’s eighth fund will make private-equity investments in various industries in the Nordic region and Germany, and take part in health-care buyouts throughout Europe, according to a marketing document, a copy of which was obtained by Bloomberg News.