STOCKHOLM, Sweden – The Swedish Cooperative Union and Banc of America Equity Partners, along with six Swedish institutions, are forming Nordico Invest, a private equity fund. The vehicle held a first and final close in December on SEK 1 billion ($120 million) and acquired a portfolio of 15 companies from Cooperative Union, said Hkan Sderbck, a partner at Nordico Invest.
Cooperative Union, a retail-based investment group, developed the concept underlying the new firm with its adviser, Maizels, Westerberg & Co. AB, a small investment-banking boutique in Stockholm. By acquiring Cooperative Union’s 15 portfolio companies, Nordico Invest freed the Cooperative Union of its non-core portfolio companies, worth a total of about SEK 1.5 billion ($180 million), enabling it to streamline its investment focus, Sderbck said. Terms of the deal were not disclosed.
With the new capital, Nordico Invest will make opportunistic investments in private, medium-size, export-oriented manufacturing and service companies in the Nordic countries, favoring those in Sweden. Investments will range from SEK 150 million ($18 million) to SEK 400 million ($48 million), McCarthy said.
The four partners running Nordico Invest, formerly of the Cooperative Union investment team, will continue to manage the acquired investments, as well as new ones. But the investment committee – a representative from Cooperative Union and a representative from Banc of America, as well as a variety of other investors in the fund – ultimately will be responsible for making investment decisions, as is typical of funds in Sweden, said Jack McCarthy, a principal at Banc of America.
The firm expects to have the fund completely invested in four to five years and plans to be an active investor in each of its portfolio companies; the group already holds at least one and sometimes two board seats for each of its existing portfolio companies, Sderbck said.
Cooperative Union and Banc of America each will hold a one-third stake in Nordico Invest. The remaining third will come from the Federation of Swedish Farmers, the Swedish Farmers’ Supply and Crop Marketing Association, FreningsSparbanken AB, the retirement and insurance arm of the Swedish cooperatives, Sirius International Insurance Corp. and the fourth National Pension Insurance Fund.
At press time, Nordico Invest had not disclosed the management fees or carried interest structure for the fund.