CEO’s greetings
First half of the year was brisk both in the fundraising and in the investment activities front. We aim for average capital growth of funds under management by at least 15 per cent annually. In the beginning of the year this target was exceeded as we grew our assets under management by 18 per cent with fundraising for CapMan Technology 2007, CapMan RE II and CapMan Life Science IV funds.
Fundraising for the CapMan Technology 2007 fund is on the home stretch, and the fund has already invested in four Nordic ICT companies. CapMan RE II fund reached its maximum investment capacity of EUR 600 million early in the year. Also the Real Estate fund made several new investments including the Skanssi shopping centre in Turku in Southern Finland. The Life Science IV fund held its final closing at EUR 54 million and has invested in a total of five new med-tech companies. All in all, we made over 20 new investments in portfolio companies and real estate assets during the first half of the year. At the end of June, the aggregate cost of these investments exceeded EUR 470 million. Exit markets remained active in the first half of the year and we exited from over 30 portfolio companies and real estate assets.
The instability in the financial markets during past months has stirred up a lot of discussion. The general consensus is that since the turbulence has its roots in the US housing market, it should not have a significant impact on middle market buyouts or real estate transactions financed with moderate debt leverage. In these investments the financing is typically provided by a consortium of a few Nordic banks. Exit markets are expected to remain active in spite of the financial market nervousness. On the bright side, we might expect valuation levels to come down as debt structures normalise. However, we will need to wait a while to be able to draw meaningful conclusions on future market conditions.
During the past few years we have built CapMan into an alternative asset class specialist. There are still plenty of growth opportunities in this market. An increasing amount of institutional investors have added the alternative asset class to their investment allocations. In order to meet the challenges in an international and growing company, we strengthened our organisation and Management Group. We strive in both our current and prospective new investment targets for lasting value creation through active ownership. In this issue of CapMan News we describe our values and methodologies when working with investments.
Wishing you an active autumn!
Heikki Westerlund
CEO
CapMan Plc