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CapMan Plc Group’s (CapMan) turnover for the period 1 Jan – 30 Sep 2001 was EUR 10.1 million (EUR 20.5 million 1 Jan – 30 Sep 2000). Profit after financial items was EUR 29.6 million (EUR 15.4 million), which includes capital gain of EUR 18 million from the sale of Sampo plc shares. Profit after taxes and minority interests was EUR 20.8 million (EUR 10.3 million). Earnings per share on 30 September 2001 was EUR 0.33 (EUR 0.22).

CapMan’s core business is private equity fund management and the company’s income derives from four sources: management fees received from the funds, carried interest from funds generating carried interest, a share of the result of CapMan’s affiliated companies and returns on other financial assets.

The interim report is divided into two sections: the funds managed by CapMan and CapMan’s business and profit for the review period.

Funds managed by CapMan

CapMan manages twelve private equity funds with EUR 1,168 million in total capital, of which EUR 465 million is managed through the affiliated company Access Capital Partners. About 90 Finnish and international institutional investors have invested in CapMan funds.

Investments by CapMan funds are divided into investments in portfolio companies and fund investments. Investments in portfolio companies include mid-sized buy-outs, technology investments and mezzanine investments (mezzanine financing) mainly in Finland, Sweden and Denmark. Buy-outs and mezzanine investments are made in manufacturing, service and retail industries while technology investments focus on fast growing software companies in the IT, telecommunications and media sectors. Of the capital currently invested by the funds in portfolio companies, 77 per cent was invested in traditional companies and 23 per cent was invested in high technology companies at the close of the review period.

CapMan is also involved in the management of fund of funds through its affiliated company Access Capital Partners, whose two funds invest in mid-sized buy-out and technology funds throughout Europe.

Investments by CapMan funds during the review period

Between January and September the funds managed by CapMan made 6 new investments and 8 substantial follow-on investments in portfolio companies, investing EUR 73.3 million (EUR 122 million) in total.

There were two new investments in the third quarter: Fastrax Oy, a manufacturer of GPS (Global Positioning System) receiver modules and via the Fenno programme in Takamaki Oy, a specialist in three-dimensional coating technology. The new investments during the first half of 2001 were in Eltel Networks Oy, a specialist in design and construction of power transmission and telecommunications networks; Danish SMEF Group A/S, a supplier to the woodworking industry; Siennax International B.V., a Dutch Application Service Provider (ASP); and Exidio Oy, a software company specialising in Internet-based treasury management systems for large corporations.

The most substantial follow-on investments during the third quarter were in Aktivist Network Oy, a local multimedia company; Finndomo Oy, a manufacturer of prefabricated housing and Modultek Oy, a specialist in product information management software.

In the first half of 2001, the most substantial follow-on investments were in the CRM (Customer Relationship Management) software company AtBusiness Communications Oyj, leisure travel company Holiday Club Finland Oy, wireless technology and data security software company Intrasecure Networks Oy (Netseal), software company LPG Innovations Oy and folding cartons manufacturer Å&R Carton AB. The follow-on investments in Intrasecure Networks Oy and LPG Innovations Oy were part of an international round of financing. The investment in health care group Mehiläinen Oy was carried out in part during the review period.

Exits by the funds

The funds managed by CapMan made no exits during the third quarter.

During the review period, the funds made one financially substantial exit when Marli Group (currently Oy Nordic Wine Group Ab) was sold to Swedish Vin & Sprit at the beginning of the year. The exit has an effect of about EUR 3.3 million on CapMan’s operating profit for 2001.

Information about the funds managed by CapMan and their portfolio companies can be found by visiting CapMan’s website

Growth in European fund investments

CapMan Plc’s affiliated company Access Capital Partners is one of Europe’s leading fund of funds and manages two funds with EUR 465 million in total capital. Access Capital Fund (ACF) has EUR 250 million in capital committed to 19 European funds. Fundraising for the second fund of funds ACF II started in spring 2001 and at the end of the review period it had capital totalling EUR 215 million. ACF II aims to build a portfolio of around 30 mid-sized private equity funds in Western Europe, approximately half focusing on buy-out funds and half on technology funds. ACF II had invested in two funds by the end of the review period. CapMan Plc will invest EUR 10 million in ACF II.

The contribution of Access Capital Partners to CapMan’s result is insignificant at this stage.

Further information about Access Capital Partners and its fund investments can be found at Access Capital’s website

CapMan Plc

Financial performance

CapMan’s turnover during the review period was EUR 10.1 million (EUR 20.5 million 1 Jan – 30 Sep 2000). Of the turnover, management fees accounted for EUR 6.3 million (EUR 5.5 million) and carried interest for EUR 3.4 million (EUR 14.4 million). The share from affiliated companies for January – September was EUR 0.3 million (EUR 0.3 million), mainly from the shareholding in Access Capital Partners. CapMan’s profit after taxes and minority interests was EUR 20.8 million (EUR 10.3 million).

Quarterly results (turnover and profit after financial items) are presented in appendix 2.

CapMan received 2,931,260 Sampo plc shares as a result of the merger of CapMan Plc and Vestcap Oyj. Approximately EUR 4.7 million was paid in dividends for the Sampo shares in April, which increased profit after financial items including imputation credit by EUR 6.6 million. CapMan Plc sold its Sampo plc shares at a market value of approximately EUR 30 million in May. The effect of the sale on the interim result after financial items was about EUR 18 million.

At the end of the review period shareholder’s equity per share was EUR 0.90, compared to EUR 0.18 on 31 March 2001, prior to the listing of the share. This significant increase is due to the good result as well as the merger of Vestcap Oyj into CapMan, which took place immediately after the close of the first quarter. CapMan’s cash assets were approximately EUR 58 million at the end of the review period and the company has no interest-bearing debt.

Four funds generating carried interest

Private equity fund management companies will start receiving carried interest when the return of a fund for investors has exceeded a required cumulative return target. Carried interest is typically 20 to 25 per cent of the fund’s cash flow through exits from its portfolio companies. The annual management fee is about 1 to 2.5 per cent of the total capital of the funds.

All of the funds managed by CapMan have the aforementioned profit sharing agreement. The number of funds generating carried interest rose to four as a result of the Marli Group exit. These four funds have capital of EUR 84.1 million, which represents about 12 per cent of the total capital in CapMan’s funds that invest mainly in Finland.

Carried interest was exceptionally high in January – September 2000 because there were two significant exits. Wide fluctuations in annual and quarterly performance are typical of private equity fund management (see quarterly results in appendix 2).


CapMan had 45 (38) employees at its Helsinki office and 4 employees in Denmark at the end of the period under review.

Changes in Group structure

In April 2001, CapMan Plc announced that it had decided to acquire the Danish private equity investor Nordic Private Equity Group (NPE). The company became a wholly owned subsidiary of CapMan on 28 September 2001. NPE specializes in mid-sized buy-outs and manages two equity funds with approximately EUR 35.4 million in capital. The funds have invested in nine companies in total and three companies still remain in the portfolio: Audio Nord International A/S (distributor of high quality hi-fi equipment and manufacturer of loudspeakers); Lindplast A/S (polyethylene packaging materials) and Reima-Tutta Oy (children’s, sports and working clothes). The funds will not

make any new investments.

The acquisition was carried out as a share exchange with NPE’s three owners and key personnel and the purchase price was 1,130,000 new CapMan B shares. The new shares have similar sales restrictions as the shares owned by CapMan’s other key personnel.

Shares and share capital

CapMan Plc’s B share has been listed on the Main List of the Helsinki Stock Exchange since 2 April 2001. The closing price on the first trading day was EUR 2.20 and on the last trading day of the review period it was EUR 1.92. The share’s lowest trading price for April – September was EUR 1.64 (4 April 2001) and the highest was EUR 2.55 (29 May 2001). The average price of trades was EUR 2.11.

At the end of September, the market value of the CapMan B shares was about EUR 119 million and the company’s total market capitalisation was about EUR 135 million. There are 62,064,630 B shares and the registered share capital is EUR 700,646.30. The number of A shares totals 8,000,000. 1,130,000 new CapMan B shares were used in the Danish acquisition. As a result, from 1 October 2001 the total number of B shares increased to 63,194,630 and the registered share capital to EUR 711,946.30.

The Extraordinary General Meeting of CapMan Plc held on 31 May 2001 authorised the Board of Directors to have the right to increase the company’s share capital by issuing a maximum of 7,000,000 new company B shares. At the end of the review period the Board of Directors had issued 1,130,000 new shares. The authorisation is valid for one year from the resolution.

The EGM authorized the Board to resolve upon purchasing a maximum amount of 3,503,649 of the company’s own B shares. The authorization had not been used at the end of the review period and remains valid for one year from the resolution.

CapMan has a warrant scheme as part of the Group’s incentive and commitment scheme for employees, excluding current shareholders. A maximum of 5,270,000 warrants will be issued and they will entitle to subscribe for a total of 5,270,000 B shares in CapMan Plc. The share subscription price will be EUR 1.26, from which the amount of dividends for the year 2001 and onwards will be deducted. The share subscription periods will begin on 1 October 2003 and 1 October 2005, and will end for all warrants on 31 October 2007. The amount of shares allocated for warrants represents about 7 per cent of CapMan Plc’s share capital. More information about the warrants scheme can be found in the stock exchange release dated 29 August 2000 at CapMan’s website under

Events after the review period

Funds managed by CapMan

The funds have not made any new investments or substantial follow-on investments since the close of the review period.

The investment by Finnventure Funds IV and V in DB2B Oy, an Internet portal for institutional kitchens and restaurants and a wholesale Internet market place (Nettikeittiö), was sold to the company’s other owners in October. The sale does not affect CapMan’s 2001 result.

CapMan Plc

There have been no significant events after the close of the review period.

Outlook for 2001

Funds managed by CapMan

The prevailing market conditions present interesting opportunities to private equity investors. Valuation of unlisted companies as well as listed companies has clearly decreased. Raising of capital via listing on the stock exchange has virtually ceased and more and more companies are turning to private equity investors to finance growth.

The role of the private equity investor is to select the optimal time and method of exit from each individual portfolio company. The success of exits from portfolio companies is not particularly dependent on the performance of the stock market. Listing portfolio companies on the stock exchange is only one exit option. Trade sales to strategic industrial buyers can be implemented even when the stock market does not provide attractive returns. A good example of this is the sale of Marli Group shares to Swedish Vin & Sprit last spring.

CapMan Plc

CapMan Plc will record a good result in 2001. Profit before taxes in January – September was EUR 29.6 million and profit after taxes was EUR 20.8 million. As management fees paid by the funds generally cover CapMan’s expenses, the final 2001 result will depend on any significant exits from portfolio companies owned by funds already generating carried interest. Exit possibilities are currently being evaluated in several portfolio companies, however it is probable that no exits with significance to CapMan’s result will occur during the final quarter.

CapMan’s 2001 result is expected to be about EUR 20 million. According to the published dividend policy, CapMan’s objective is to distribute at least 50 per cent of the net profit in dividends, which indicates a dividend of at least EUR 0.14 per share in 2001. The final dividend will be decided by the Annual General Meeting held in spring 2002.

The establishment of new funds will proceed in the fourth quarter. Fundraising for CapMan’s seventh private equity fund CapMan Equity VII started during autumn. The final size of the fund of funds Access Capital Fund II will be determined by the

end of March 2002. At the end of the review period it had capital of EUR 215 million.

CapMan will continue to carry out its growth strategy in the Nordic region. The Danish acquisition is aimed to strengthen CapMan’s position in mid-sized buy-outs and technology investments in Denmark and places CapMan firmly on track as one of the leading private equity investors in the Nordic countries. CapMan is also evaluating the potential to expand its operations in Sweden.

Helsinki, 15 November 2001


Board of Directors

The full Interim Report including tables is available to download from the enclosed link.