Verdane closes buyout fund on SEK3bn

Direct-secondaries player ventures into buyouts
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Verdane Capital has closed its buyout fund Verdane Edda on SEK3bn, marking a shift away from its traditional direct secondaries focus.

Launched in October 2017, Verdane Edda had an initial SEK2.5bn target and was on the road for around two months. “By Christmas, the fundraise was in practice done,” Bjarne Lie, Verdane managing partner told The Drawdown. The vehicle closed on its SEK3bn hard-cap.

Domiciled onshore in Sweden, the fund was advised by London-based placement agent Rede Partners and the Stockholm-based law firm, Andulf Advokat.

Verdane Edda was oversubscribed having received commitments from university endowments, foundations, insurance companies, family offices, government agencies as well as public and private pension funds – 60% of which came from outside the Nordic region. Overall, 50% of capital came from non-profit investors.

Lie confirmed Adams Street, AP3, Argentum, BMO, eQ Asset Management, Formuesfortvaltning, Mandatum Life, Tesi and Unigestion were among the LPs backing the vehicle.

According to Lie, the key driver behind raising a buyout fund was to enable the firm to act on opportunities it previously could not: “We had to pass on many larger opportunities that the current funds could not capture, because of diversification limits. Edda allows us to capture these larger deals, using our existing tool box, expert team and large networks.”

The vehicle will target individual investments of up to SEK 5m, investing in Nordic companies operating within three main areas: software and consumer internet sectors, as well as more traditional businesses that could be accelerated with the help of digitalisation.

Verdane Edda aims to take controlling stakes in single companies, but also accept minority positions where relevant. Similar to its predecessors, there are possibilities for co-investment opportunities.

Lie explained the vehicle will have a slightly longer lifespan, “up to 14 years”. Meanwhile, the terms and conditions are typically vanilla and carried interest will be paid on the whole fund.

While Verdane Edda hasn’t made any investments just yet, Lie added that there is a “very exciting pipeline of 30-40 deals.”

Out of the vehicle’s six predecessors, vintage 2003-13, Verdane Capital IV to VIII are fully invested having raised between NOK790m and SEK2000m. The most recent forerunner, vintage 2016 Verdane Capital IX is still investing its SEK3000m.

Founded in 2003 by Bjarne Lie and Thomas Falck, Verdane Capital was spun out of Norwegian VC firm, Four Seasons Venture. Headquartered in Norway, the firm also has offices in Sweden, Finland, Denmark and the UK.

In light of its latest vehicle, the firm recently appointed Jakob Tolleryd and Johnny Rindahl as partners of Verdane Edda’s advisory team for their wealth of experience within e-commerce and software respectively. Tolleryd is based in Stockholm while Rindahl is based in Oslo.