Nordax Finans, a new financial services company based in Stockholm, has become Palamon Capital Partners’ second major deal in the Scandinavian region.
Palamon has so far invested €13 million as the first phase of an agreement to commit an eventual €27 million. The investment follows the granting of an operating license to the newly formed company by the Swedish regulator, Finansinspektionen.
Nordax Finans will offer medium-term unsecured loans to consumers, initially in Sweden but with the intention of expanding throughout the Nordic region. The general-purpose consumer credit market in Sweden is relatively immature but still estimated to be worth some €10 billion, just over half of which is accounted for by personal loans. Within this market, demand for medium-term unsecured loans is growing at around 17 percent per annum.
The management team, led by Peter Brannerydh, comprises five individuals who have built and run two unsecured customer loans businesses in the region. Christian Beck, a serial entrepreneur who has built a number of businesses in Scandinavia, has joined the firm as chairman. The team is investing alongside Palamon and will take a 20 percent equity stake.
“As a pan-European investor, we are attracted by the combination of fundamentally strong Scandinavian economies and relatively immature consumer credit markets,” said Erik Ferm, a partner at Palamon. Palamon’s only previous major deal in the region came in February 2001, when it invested in Zensys, a Danish provider of enabling technology for control networks.
Formed in 1999, London-based Palamon manages capital commitments of €440 million through Palamon European Equity LP and parallel funds. The firm aims to make investments of between €20 million and €50 million in growth services companies and currently has portfolio companies in the UK, Italy, Spain, Denmark, Sweden, France and Germany.