Swedish private investment firm Fidelio Capital will hone in on building market leaders in the hope of creating “outsized” risk-adjusted returns by deploying a sector- as well as region-agnostic approach following the final close of its third vintage, founder and CEO Gabriel Fitzgerald has told Real Deals. 

His comments come after Stockholm-headquartered Fidelio last week announced it had surpassed its €1bn target for its third fund, while tapping into additional international investors. Fidelio III will target businesses operating in “niche” markets with sales of up to €200m, Fitzgerald said while elaborating on the firm’s investment strategy. 

The vehicle is more than triple the size of its predecessor, which collected approximately €300m in 2018. 

Fidelio III started raising capital last year, held a first close in August 2022 and a final close in May this year.

The fund has been raised amid a muted fundraising environment. In spite of the industry slowdown, it managed to secure commitments from a group of entrepreneurs, families (including family offices), and individuals from Northern Europe and the US, it said. To ensure skin in the game, the team at Fidelio also invested close to €125m in Fidelio III. No pension funds or insurance companies were tapped by the Swedish sponsor.

The Sweden-domiciled fund enjoyed a near 100% re-up from existing investors, Fitzgerald said. 

Commenting on the number of investments the firm plans to make this year, he explained:  “We never set our targets in relation to the number of investments or invested capital per year.” The firm prefers to focus on idea generation and deal sourcing and value creation targets instead of capital deployment targets, Fitzgerald added. 

Fidelio was established in 2010 and also has an office in London outside of its base in Sweden.

The firm likes to describe itself as a combination of the professional and active ownership model of traditional private equity, with an entrepreneurial, flexible and long-term approach to investing.

Since its inception, the firm has invested in 12 platform companies and supported more than 150 bolt-ons across the world. According to the firm’s website, its investment typically ranges from €10m to €200m. The capital Fidelio injects in businesses is often used to provide liquidity to shareholders, act as expansion capital for growth and/or finance add-on acquisitions

UBS Private Funds Group acted as the global placement agent for the fundraise to Fidelio. Proskauer Rose (UK) acted as the lead legal adviser, and Advokatfirman Vinge KB acted as Swedish legal adviser.