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Northzone raises €175m for fund V

The Nordic-focused private equity firm has closed its fifth fund on €175 million, more than twice the size of its previous vehicle.

Nordic private equity firm Northzone Ventures has held a first and final close of its fifth venture capital fund, Northzone V, on €175 million ($216 million).

According to Karl-Christian Agerup, general partner at Northzone Ventures, marketing for the new fund began just before Christmas 2005. Agerup told PEO that the vehicle is yet to make any investments, but the firm is currently looking at two or three potential targets.

The problem for us has been too small funds and having to make hard decisions, so we decided to cap this fund at €175 million.

Karl-Christian Agerup, general partner, Northzone Ventures

The vehicle attracted commitments from new limited partners, including AlpInvest Partners, Pantheon Ventures and BNP Paribas Private Equity.

Investors in previous funds that have made allocations to Northzone V include Argentum, Nordea Life and Pensions, LGT Capital Partners, Vital, Access Capital Partners and Swiss Re.

Northzone Ventures said that 55 percent of allocations for Northzone V have been provided by non-Nordic investors.

Agerup said the fundraising was significantly oversubscribed but the firm had decided to stick with its original hard cap. “We looked at the fund IV portfolio and felt that we would be able to use more money in some of those companies,” he said. “The problem for us has been too small funds and having to make hard decisions, so we decided to cap this fund at €175 million.”

Global Private Equity acted as placement agent on the fundraising, while Hogan & Hartson was appointed legal advisor.

Northzone V will follow its predecessors’ strategy, investing in growth technology, software and telecom companies, primarily in the Nordic region.

Northzone IV, which closed on €78 million in 2003, has made investments in multiplayer online games developer Funcom, which listed on the Oslo Stock Exchange at the end of last year; shopping comparison service PriceRunner, sold to ValueClick in late 2004 for a 3x money multiple; and MCP, a provider of mobile communication platforms for ships.

Established in 1996, Northzone Ventures has eight partners operating out of offices in Copenhagen, Oslo and Stockholm. The company has made more than 40 investments in the Nordic region to date.