Danish funds in private equity move
DENMARK - Three Danish pension funds are among the first investors in a new private venture fund targeting the IT and biotech sectors.
Sunstone Capita, the company managing the fund, already has attained assets and commitments of DKK 2.9bn (€389m) and expects to raise another DKK400m from international investors over the next 12 months.
Private investors have linked up with state-backed investment company Vækstfonden to finance the new fund, which is expected to invest in "growth-oriented companies with a global focus," said a statement from Vækstfonden.
Private sector investors include pension funds Industriens Pension, MP Pension and Lønmodtagernes Dyrtidsfond, along with insurers Nordea Liv & Pension and Tryg Denmark and private investors through a feeder fund managed by Carnegie Private Banking.
Having raised 2bn crowns by the first investment raising, Sunstone Capital now hopes to draw in another DKK400m crowns in investment by the second closing in 12 months' time.
"We expect to bring more Danish and Nordic institutions on board, as well as international players," Jimmy Fussing Nielsen, managing partner of Sunstone Capital's technology ventures team, told IPE.
This latest fund is divided into four sub-funds. But Sunstone Capital was launched with four funds under management - two new funds which have yet to invest, and two primary funds.
One of the primary funds will take on and develop a portfolio of 33 IT and biotech companies from Vaekstfonden, valued at DKK900m, while the other, which has yet to invest, has DKK800m of capital commitment from Vaekstfonden.
The two new funds, meanwhile, have start-up capital of DKK1.2bn, which has been pledged jointly by the private sector investors and Vaekstfonden. Sunstone Capital said its two investment teams would focus on early-stage technology and life science companies with global potential, albeit their main focus will be on companies based in the Nordic region.
Jan-Ole Hansen, finance director of Industriens Pension, said investors hope for high returns from the venture fund.
"We see big potential for growth in IT and biotech businesses. We expect our investment of DKK150m to bring our 337,000 members a return of up to 20%. At the same time, the risk with this kind of investment is higher than it is with investments in quoted shares and bonds.
"But as a management company, Sunstone Capital will operate under conditions equal to those other venture companies are faced with," he added.