Main events in 2012
Progress in fundraising
Fundraising was a central theme for CapMan in 2012 with three fundraising processes ongoing for three separate investment partnerships. The CapMan Buyout X fund achieved first closing at €151,8 million in November. Fundraising for the fund continues in 2013. CapMan Nordic Real Estate and CapMan Russia II funds are expected to achieve first closings in the next few months.
During the year, funds exited the Tokmanni Group, Ascade, Inmeta Crayon, Ordyhna, Quickcool and Turun Yliopistonkatu 22. In addition, funds made a partial exit from Metals and Powders Technology. After year-end, funds managed by CapMan exited IT2 Treasury Solutions and MQ and signed agreements to exit Tieturi Group and Locus.
Five investments and several add-ons
During the year, funds made a total of five new investments. CapMan Buyout invested in Norwegian well management and drilling services provider Acona in December. CapMan Russia invested in sports retail chain store Top League, diagnostic laboratory chain KDL Test and laboratory equipment and reagent producer Vital Development. CapMan Real Estate acquired an office building in Sollentuna in the Greater Stockholm area. The investment is the team’s first in Sweden since the expansion of CapMan Real Estate into Stockholm in 2011. A total of 20 add-on investments and arrangements were made throughout the year, mainly in CapMan Buyout portfolio companies. The most significant arrangement was the creation of Fortaco, a manufacturing partner for the engineering industry.
Value creation at the core
Our investment teams focused on the value creation of portfolio companies and properties and the fair value of our fund investments developed favourably in 2012. Local presence and active ownership provide a great foundation for the value development effort. Real estate development remained active over the year. The second phase of the Willa shopping centre, a property owned by CapMan Real Estate II, was inaugurated in October.
Effective purchasing for portfolio companies
CapMan’s purchasing scheme CaPS helps portfolio companies lower the costs of their non-strategic products and services, which in turn improves profitability. The savings made to CaPS companies in 2012 exceeded €10 million in Finland and Sweden.
Responsible investment practices
In December, CapMan became a signatory of the UN Principles for Responsible Investment (UN PRI). Signing the UN PRI is the next step in the integration of environmental, social and governance (ESG) issues into our decision making and investment processes. In practice, CapMan already follows the principles for responsible investment in all our funds on a general level and is actively seeking to develop ESG practices further. The Skanssi shopping centre was granted LEED environmental certification, making it the only shopping centre in Europe with LEED certification for both the construction process and operations.
Reorganisation of investment activities
During 2012, CapMan prepared for the creation of a new CapMan Credit team. The team was established in February 2013 and will continue to execute the investment strategy of the Mezzanine V fund while building a foundation for the development other debt financing products. The two members of the investment team are based in CapMan’s Stockholm office.
CapMan began investigating options for the establishment of a new Public Market fund together with a partner. The planned Public Market Fund II would be established as an independent fund from CapMan and the new fund would pay management fees and carried interest income to CapMan based on fund commitments made through CapMan in accordance with the agreement. The existing Public Market Fund continues its exit and value creation activities in line with its strategy and the aforementioned arrangement in the Public Market Fund II has no effect on CapMan’s earnings potential from the Public Market Fund.
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