Industri Kapital goes back to its roots

In the past two years, Swedish private-equity house Industri Kapital has endured a protracted and difficult fund-raising process for its fifth fund, which ultimately closed at just a third of the original e2.5 billion target size. But after responding to investors' concerns by returning to its small to medium mid-cap focus and achieving a string of highly lucrative exits this year, the future looks brighter.

INDUSTRI KAPITAL IS one of a small group of successful, large non-UK and non-US private-equity houses operating in Europe. With e3.5 billion in funds under management and specializing in mid-cap investments in northern Europe, the Stockholm-based firm has been impressing investors and rivals with a standard 20% internal rate of return on deals since its foundation in 1988 by former Esselte Group finance director Björn Savén.

It’s not the kind of firm that one would expect to struggle to raise new funds from outside investors at a time of flat returns in conventional asset classes.

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