Nordea Asset Management (NAM) has achieved a milestone in its private equity strategy, reaching the target size of EUR 150m for its secondary-investments focused fund, Nordea Private Equity Secondary Fund I. 

This is ahead of the fund's final close on 12 January 2021, according to a statement.

According to NAM, secondary investments have been delivering returns of around 18 percent gross internal rate of return between 2013 and 2019. This development, combined with the low-yield environment, makes more small and mid-sized institutions beef up their exposure to private equity. In addition, the minimum investment threshold for NAM's fund is EUR 125,000 and with the possibility to redeem the investment after three years unlike many PE funds where the minimum investment is higher and the commitment is longer.

"This new product — and indeed our whole product range — offers smaller and medium-sized investors access to private equity investments, thanks to a lower threshold for commitments and shorter deployment periods, leading to a rapid scaling of private equity exposure combined with a typically shorter duration. We are making illiquids more liquid for our clients," says Head of Nordea Private Equity Christen Estrup.

NAM highlights that Covid-19 has positively impacted secondary deal flows, with many general partners utilizing this market to provide liquidity to their investor base. Nordea's first secondary fund aims to take advantage of this environment and focuses on EUR 5-50m transactions in individual funds, general partner-led and larger syndicated deals.

"We are very proud of our clients’ confidence in us despite a very challenging environment and believe that our high selectivity and strong focus on quality assets will enable our first secondary fund to deliver attractive returns to investors," says Julien Marencic, who manages the fund.

Nordea Private Equity (NPE) offers a range of diversified private equity investment vehicles and manages capital on behalf of institutional clients, family offices and foundations. NPE's flagship fund, Nordea Specialised Investment Fund, SICAV-FIS – Global Private Equity Fund, has over 50 institutional investors and private equity commitments of over EUR 1bn to top quartile funds since 2012, according to the statement.

In 2020, NAM decided to extend its offering in the illiquid space by expanding its internally-managed private equity offering as well as developing private credit solutions. NAM also maintains a partnership with Trill Impact, a private equity firm founded by Jan Ståhlberg, who is a former partner at private equity heavyweight EQT.

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