Main components of income

CapMan Plc’s income derives mainly from management fees from the funds, carried interest from funds generating carried interest and returns on direct fund investments made from CapMan Plc’s own balance sheet. In addition, CapMan receives income from real estate consulting operations and a share of the result of associated companies.

Management fees 

• management fees are determined during the investment period by the original fund size and thereafter on the basis of the remaining portfolio at acquisition cost
• annual management fees are typically 0.5–2.5% of the funds’ total capital (equity funds 1.5–2.5% p.a., mezzanine funds 1.25–1.5% p.a. and real estate funds 0.5–1.0% p.a.)
• the objective is that management fees cover CapMan’s operating expenses

• as a fund management company, CapMan receives carried interest after the fund has returned a preferential return (usually 7–8% p.a.) to investors
• CapMan’s share of carried interest (a fund’s cash flow through exits from its investee companies or properties) is typically 20–25% for funds established before 2004 and 10–15% for funds established thereafter
• a share of carried interest received from funds established in 2004 and thereafter is distributed to the members of the investment team responsible for the fund’s investment activities
• there may be volatile fluctuations in carried interest income in different years according to whether exits are made by funds generating carry
• as at 30 September 2007 the funds generating carry were Finnventure II, Finnventure III, Finnventure IV and Finnmezzanine II B funds and the Fenno Program

• CapMan Plc has been a substantial investor in the funds managed by the Group since 2002
• CapMan’s objective is to invest 2–10% of total capital in equity funds investing directly in portfolio companies
• investments improve the Company’s return on equity and even out income fluctuations
• the significance of investments will grow in future, when there is an increase in the amount of invested capital
• substantial commitments have been made in CapMan Buyout VIII, CapMan Technology 2007, CapMan Equity VII, CapMan Mezzanine IV, CapMan Life Science IV, Swedestart Tech and Access Capital Fund II funds to date