Press release from 25 October 2017:
Major investors behind new private equity fund with a focus on social responsibility
Several capital-strong investors are behind a new private equity fund that will invest in small and medium-sized companies with a special social profile. The trend is spreading globally, but the fund is the first of its kind in the Nordic region to have the European Investment Fund and the Danish Growth Fund as anchor investors.
Den Sociale Kapitalfond Invest is the name of the new fund, which is the first so-called social impact investment fund in the Nordic region, which in addition to a financial return for investors will also make a positive, measurable difference for vulnerable groups in Denmark.
The recipe is to create growth in small and medium-sized companies that combine a strong commercial growth potential with a special social responsibility. ”
A lot of good small and medium-sized companies in Denmark are run by owners with great social responsibility. They employ local unemployed people from the margins of the labour market, contribute to the development of a vulnerable local area or develop products and services that help vulnerable people to become part of the community. There is a great social and economic potential here, so they are the target group for Den Sociale Kapitalfond Invest, ” says Managing Partner Lars Jannick Johansen
Lars Jannick Johansen has extensive experience with this type of investment. Together with TrygFonden, he helped establish Den Sociale Kapitalfond in 2011, which in collaboration with several non-profit foundations and public partners has worked with 69 different social enterprises so far. It is this work of finding “the right recipe” for combining social and economic success that forms the basis of Den Sociale Kapitalfond Invest.
Den Sociale Kapitalfond Invest is backed by a number of significant investors, including the European Investment Fund and the Danish Growth Fund as anchor investors, together with the Novo Nordisk Foundation, TryghedsGruppen, the Hempel Foundation and the Færch Foundation. More are expected to participate in the coming months.
For the European Investment Fund (EIF), Den Sociale Kapitalfond Invest is a frontrunner in the Nordic region.
“The EIF is thrilled to be able to enter into the first agreement in the Nordic region under our social impact investment programme with Den Sociale Kapitalfond Invest. The EIF’s investment commitment is a significant contribution to advancing the Social Capital Fund’s development from philanthropy to social impact investing on a commercial basis. Our investment supports an investment team with a unique strategy in its focus on Danish companies that create new opportunities for vulnerable unemployed, and with the investment we contribute to meeting a financing need and improving opportunities for social enterprises in Denmark in need of growth capital ,” says Pier Luigi Gilibert, Managing Director of the EIF.
Den Sociale Kapitalfond Invest is characterised by being a minority investor who will work closely with the owners of the companies. The goal is to develop the companies to the next level of growth and strengthen the special values on which the companies are based – typically towards a generational change, an industrial partner or a collaboration with a larger private equity fund.
”We are pleased to be part of establishing the first commercial social capital fund in the Nordic region. The new fund builds on positive experiences from Den Sociale Kapitalfond’s work with investments and accelerator projects in Danish SMEs, which since 2011 has demonstrated how a healthy bottom line and social profile can go hand in hand. We look forward to the investment team’s many experiences now being brought into play in investments in companies where a strong social profile is an essential part of the business concept. In this way, the investors in the fund have the prospect of achieving both a financial and a social return, which is both innovative and attractive ,” says Rolf Kjærgaard, Investment Director at the Danish Growth Fund.
Quotes from other investors:
Novo Nordisk Foundation:
“With the grant for the establishment of Den Sociale Kapitalfond Invest , the Novo Nordisk Foundation wishes to contribute to achieving a positive social impact for marginalized people in Danish society, including through the creation of jobs and active citizenship,” says Birgitte Nauntofte, CEO of the Novo Nordisk Foundation.
TryghedsGruppen:
“In the Nordic region, it is new to think economically and socially bottom line together. We see a global trend where capital-strong investors gather around the same purpose, and it makes a lot of sense for us as an investor to combine considerations for both society and the bottom line ,” says CEO Søren Kristiansen, TryghedsGruppen.
Hempel Foundation:
“In our normal financial investments, we follow a number of ethical guidelines. The investment in Den Sociale Kapitalfond Invest is one of our first attempts at direct impact investing, where we expect both a financial return and concrete social results for vulnerable people. At the same time, we are pleased to be part of initiating a new development with impact investing in Denmark “, says Anders Holm, Director of the Hempel Foundation.
The Faerch Foundation:
“Sustainable business growth is a prerequisite for us to maintain an inclusive society in Denmark. And this applies to environmental, social and commercial sustainability. We expect that Den Sociale Kapitalfond Invest will help set the agenda for this development in Denmark in the coming years ,” says director Martin V. Hansen.
Facts about Den Sociale Kapitalfond Invest:
Size: Currently DKK 218 million.
Investors: The European Investment Fund, the Danish Growth Fund, the Novo Nordisk Foundation, TryghedsGruppen, the Færch Foundation, the Hempel Foundation, Den Sociale Kapitalfond, partners and Senior Advisors.
Focus:
- Small and medium-sized enterprises in Denmark and southern Sweden within trade, production and service.
- Turnover typically DKK 30 – 200 million.
- Strong growth potentials and special social responsibility – in the form of goals to hire employees from the margins of the labour market, contribute to the development of a vulnerable local area or develop products and services that help vulnerable people.
Characteristics:
- Den Sociale Kapitalfond Invest is a minority investor (typically 10-49%) and can combine equity investments with subordinated loans.
- The foundation is an active and committed co-owner with great respect for the management and existing ownership and a targeted and systematic approach to developing the companies.
- The Fund sets both economic and social objectives for its investments in cooperation with businesses. Both the financial and social results are reported to the fund’s investors and are included in the management team’s performance targets.
The team behind Den Sociale Kapitalfond Invest
Den Sociale Kapitalfond Invest is led by a dedicated and experienced management team:
- Lars Jannick Johansen (managing partner) is the former CEO of Den Sociale Kapitalfond, which he established together with TrygFonden in 2011. He has extensive experience in the development of social enterprises, including strategy development, social responsibility, as well as management and organizational development. Since 2013, Lars has been named a Young Global Leader by the World Economic Forum.
- Jeanette Hangaard Thielfoldt (partner) has been Head of Investment at Den Sociale Kapitalfond. Prior to that, she has been CFO and COO in both international groups, including Scots. Honeywell, as Danish SMEs, and has been in charge of, among other things, the coffee and café company Amokka as co-owner and CEO. Jeanette has extensive experience in the management and development of SMEs, including financial and operational optimization, optimization of value chains and sales.
- Torben Agerup (partner) has many years of experience with private equity from LD and Maj Invest as investment manager, where he has worked with the SME segment and completed a large number of acquisitions and sales of companies. Torben has strong competencies in strategic analysis, financing and the purchase and sale of companies.
The management team collaborates with four experienced Senior Advisors who advise the fund in relation to its investments:
- Jeppe Christiansen, CEO of Maj Invest, former CEO of Danske Bank
- Mads Øvlisen, Chairman of the Mediation and Complaints Institution for Responsible Business Conduct, former CEO of Novo Nordisk
- Per Agger‐Nielsen, investor, advisor and board member, former partner in Industry Development
- Peter Nørgaard, founder and board member, Creativ Company and Code of Care, former CEO of Creativ Company
Accura and EY are competence partners and have advised Den Sociale Kapitalfond Invest in connection with the fund’s establishment.
About the investors:
- The European Investment Fund (EIF) is part of the European Investment Bank Group. The EIF’s mission is to support Europe’s small and medium-sized enterprises with access to finance. The EIF designs and develops venture and growth capital, guarantee and microfinance instruments that specifically target this market segment. In doing so, the EIF promotes EU objectives in support of innovation, research and development, entrepreneurship, growth and jobs. www.eif.org
- The Danish Growth Fund is the state’s financing fund, which helps to create more new growth companies by providing capital and skills. In collaboration with private investors, the fund has since 1992 co-financed the growth of more than 6,600 companies for a total commitment of more than DKK 20 billion. Read more on www.vf.dk
- The Novo Nordisk Foundation is a Danish commercial foundation with two objectives; to provide a stable foundation for the commercial and research activities of the companies of the Novo Group and to provide support for scientific, humanitarian and social purposes. www.novonordiskfonden.dk
- TryghedsGruppen is the main owner of the insurance company Tryg and is behind TrygFonden, TryghedsGruppen creates value and security through long-term investments and non-profit distributions. www.tryghedsgruppen.dk
- The Hempel Foundation is a commercial foundation and is the owner of the Hempel Group. The primary purpose of the fund is to secure and support the financial basis of the Hempel Group. The secondary purpose of the foundation is non-profit and charitable. www.hempelfonden.dk
- The Færch Foundation is a commercial foundation based in Holstebro. The foundation’s vision is to make a difference for Northwest Jutland by supporting enterprise, growth and attractiveness through the development of business, culture, entrepreneurship and educational activities in the area. www.faerchfonden.dk
- Den Sociale Kapitalfond develops, tests and disseminates new investment tools that can help more companies and investors to combine social and business success. Den Sociale Kapitalfond Invest is the fund’s first spin-off, which scales its efforts on a commercial basis. www.socialkapitalfond.dk
Contact for further information:
- Den Sociale Kapitalfond Invest: Managing partner Lars Jannick Johansen, ljj@socialkapitalfond.dk, 2961 6892
- European Investment Fund: Press Contact David Yormesor, d.yormesor@eif.org, +352 24 85 81 346
- The Danish Growth Fund: Senior Communications Advisor Nathali Selmeczi Leth, nsl@vf.dk, mobile 2860 0113
- Novo Nordisk Foundation: Press Officer Christian Mostrup Scheel, CIMS@novo.dk, 3067 4805
- Tryghedsgruppen: Head of Communications Michael Carlsen, mc@tryghedsgruppen.dk, 2949 4685
- Hempel Foundation: Director Anders Holm, ANDHO@hempel.com, 4057 0791
- Færch Foundation: CFO Martin Nygaard Christoffersen, mnc@faerch.dk, 2940 3611
- Accura: Associate Partner Anders Rubinstein, anders.rubinstein@accura.dk , 3078 6770; partner Henrik Juul Hansen, henrik.juul.hansen@accura.dk, 3078 6740
- EY: Tax Partner Inge Heinrichsen, inge.heinrichsen@dk.ey.com, 2529 3761