CapMan, the private equity investor in the Nordics and Russia, has announced last month that they will “restructure their investment operations” which in essence means they will stop investing. To be more precise, they will focus on their current portfolio companies and not raise any new funds nor do any new investments in the future.
The decision to so comes after realising that they have not been able to yield enough returns to their LPs. CapMan’s Technology 2007 fund will not invest in any new companies from now on and the the team behind the fund will focus on developing the current portfolio companies, helping to maximise returns to their investors.
“CapMan’s goal is to offer the investors in its funds a return on their investment matching the top quartile returns in the field,” says CEO Lennart Simonsen. “The performance of early-stage technology investments in particular has not provided, not in Europe or in our operations, a sufficient level of risk-adjusted return for investors in recent years, and as a result we have decided not to establish any new, independent technology funds in future.”
The restructuring of all this will have approximately 5 million euro negative effect for CapMan’s 2010 result. 3.8 million euros will be reserved for write-downs and about 1.2 million euro will be reserved for restructuring expenses.
It’s sad to see CapMan moving away from the Technology scene as an investor. Would there have been other ways out of this? Certainly. Let’s hope this doesn’t create too big of a vacuum in the ecosystem.