Executive summary
Introduction
Based in Copenhagen, Polaris Private Equity is a leading lower mid-market private equity firm focused on buy-out transactions in Denmark and Sweden, the prime area for such investments in the Nordic Region.
Between its inception in 1998, Polaris funds have invested in 30 independent companies (platform investments), completed more than 50 add-on acquisitions and made 14 realisations. The group of investors includes reputable Nordic investors such as ATP Private Equity Partners, Danske Bank and Kirk Kapital, as well as international institutional investors such as Pohjola, Auda, Unigestion and Alliance Trust.
Polaris I (vintage 1999, EUR 180m/DKK 1.35bn), the first fully realised Danish fund, exited its final investment in January 2008. The 8 fully realised investments of this fund delivered gross IRR of 19.9% (2.5x capital multiple) and net IRR of 16.9%. The return of Polaris I is in the upper quartile for its vintage in European private equity funds.
Polaris II (vintage 2005, EUR 270m/DKK 2.0bn) is fully invested in 10 platform companies in Denmark and Sweden and has completed 19 add-on acquisitions.
Polaris III (vintage 2009, € 365m/DKK 2.7bn) is open for investments in companies in Denmark and Sweden and has invested in 5 Danish and 6 Swedish companies so far, as well as completed 19 add-on acquisitions.
Management and organisation
The Polaris funds are established as Danish limited partnerships (‘K/S’), which own the portfolio companies as separate entities.
The limited partnerships have entered into agreements with Polaris Management as manager of the funds’ investments. Polaris Management, which is legally the employer of the partners, has a Board of independent Executive Directors. All investment decisions are made by an Investment Committee comprising of the Polaris’ partners, subject to final review and approval by the Board. Cf. the tab ‘Organisation’ for further information on partners, directors and industrial advisors.
A fundamental principle in Polaris Private Equity is the alignment of interests between the investors (limited partners) in the funds, the managements of the portfolio companies and the partners of Polaris. The returns attributed to managements and partners are thus a reflection of the returns generated for the investors through a market conform carried interest program. Partners and managements are requested to co-invest their own means into the fund or the portfolio companies.
