Nordic executes biggest GP-led restructuring – exclusive

Nordic Capital has executed the largest-ever GP-led restructuring with Coller Capital and Goldman Sachs Asset Management.

Coller and Goldman will acquire around €1.5 billion worth of net asset value held in the Scandinavian buyout firm’s 2008-vintage Nordic Capital VII fund after around 60 percent of LPs by value decided to sell their exposure on Monday, according to two sources familiar with the deal.

The nine assets held in Fund VII will be moved into a five-year continuation fund which is backed by Coller, Goldman and the remaining roughly 40 percent of LPs by value who decided to roll over their exposure, one of the sources said.

It is understood that Coller will account for around 70 percent of the secondaries capital, and Goldman the remainder. The pair are paying an 11 percent premium to NAV. It is unclear which valuation date the deal is based on.

LPs who decided to roll over their exposure have been broadly offered the same terms as they had in the existing vehicle, according to one of the sources. More than 80 percent of LPs by value approved of the proposal going ahead, the source added.

The deal is expected to formally close in April.

With around €1.5 billion trading in NAV, the Nordic deal is almost twice the size of Peruvian private equity firm Enfoca Investments‘ restructuring of two of its funds, which was the largest GP-led transaction announced this year. That deal involved around $950 million in capital commitments.

Nordic Capital, one of Scandinavia’s largest buyout firms, began discussions with LPs to restructure its Fund VII in September due to a difference in motivations in the vehicle’s LP base, as Secondaries Investor reported in September. Some LPs wanted to exit their investment as the fund had reached the end of its life, while others wanted to remain in the vehicle to keep their allocations up and allow more time to realise the remaining value in the portfolio, a source said at the time.

The firm hired Campbell Lutyens to advise on the potential process. In January Coller emerged as the preferred buyer, as Secondaries Investor reported.

The process attracted criticism from some LPs after investors were given a 20-business-day deadline by which to read a thousand-page document regarding the proposal and decide whether to sell or keep their exposure.

Assets in Fund VII include disabled and elderly mobility solutions provider Sunrise Medical and Norwegian offshore energy service company Master Marine, according to Nordic’s website.

LPs in Fund VII include Pennsylvania Public School Employees’ Retirement System, Washington State Investment Board and Ireland Strategic Investment Fund, according to PEI data.

Nordic is raising its ninth flagship fund with a €3.5 billion target and was understood to be nearing the final close as of mid-February.

Nordic, Campbell Lutyens and Coller declined to comment. Goldman did not return requests for comment by press time.

– Toby Mitchenall contributed to this report.