Nordic restructuring is shaping up to be big

LPs now have 20 days to vote on the deal and decide whether they want to roll over or cash out.

Nordic Capital’s proposed restructuring of its 2008-vintage fund could be one of the largest GP-led transactions ever inked, sister title Private Equity International has learned.

Limited partners in the €4.3 billion Nordic Capital VII fund were notified this morning that they now have 20 days to vote on whether the deal should proceed and, if so, whether they will sell their stake in the fund or roll their positions over into a new five-year continuation fund.

Coller Capital and Goldman Sachs have been selected as buyers in the deal and will pay an 11 percent premium to net asset value that, if ratified by LPs, will see the nine unlisted assets in the fund – valued at €2.2 billion – rolled into the new vehicle, according to two sources with knowledge of the situation. Coller will account for 70 percent of the deal and Goldman 30 percent. Campbell Lutyens is advising on the deal.

If all the LPs took up the liquidity option, Coller and Goldman could end up investing €2.44 billion in the deal. Based on the limited number of historical precedents to this type of transaction, this is unlikely. However, even if investors accounting for only half of the fund’s value took up the offer, the deal would still break ground as one of the largest GP-led secondaries transactions ever and would mark another watershed moment in this fast-developing area of the secondaries market.

A number of name-brand managers have accessed the secondaries market during 2017. Warburg Pincus sold a $1.2 billion strip of assets from a 2012-vintage mega-fund, while both EQT and BC Partners ran stapled processes on older funds to aid fundraising efforts on new vehicles. In April Abu Dhabi’s Mubadala Capital announced a giant stapled deal, selling $1.75 billion-worth of fund and direct investments to Ardian and receiving a $750 million commitment to a new fund.

Unlike some of the sizeable deals referenced above, the Nordic restructuring is not connected to the firm’s current fundraising efforts. Nordic Capital, Goldman Sachs, Coller Capital and Campbell Lutyens all declined to comment.