|Fjord Capital Partners|
Fjord Capital Partners was created to leverage the Fjord Ventures operating model and capitalize on smaller, management intensive investment opportunities not compatible with traditional venture capital or corporations. The Fjord Ventures model maximizes return on investment by building strategic value for exit partners, reducing operating costs and accelerating time to market. The firm’s strong network of large corporate partners is crucial to validating market opportunities and identifying capabilities that maximize value creation for the buyer. The capital efficiencies created with shared infrastructure and a virtual operating model reduces operating costs.
Fjord’s investment approach capitalizes on market realities caused by poor returns on private equity investments, rising costs of corporations’ internal R&D and growth needs of leading life science corporations. The Fjord Model builds companies that match the need for top-line growth and innovation at life science corporations and high financial returns for private equity investors.
The extensive Fjord Ventures network provides a proprietary pipeline of deals. The Fjord pipeline is a “melting pot” where novel, disruptive, medical concepts have been created through participation of leading academic labs, medical industry thought leaders, entrepreneurs, multinational corporations and experienced management.
Fjord's Investment Approach
The Fjord investment formula indicates that internal rate of return is a function of the exit value over the time and capital spent. Our investment approach works primarily to reduce variables in the denominator that can be directly controlled through diligent management.
FCP targets company exits earlier than traditional venture capital. Fjord companies typically exit prior to initiating commercialization activities that are performed more efficiently by the large corporate buyer. The time and capital-intensive nature of these commercialization activities often lead to a lower IRR and may be less attractive for the private equity risk capital.
In contrast to traditional venture funds, FCP does not generally participate in investing syndicates but does occasionally allow certain private investors to provide cooperative equity capital. Additionally, Fjord’s Corporate Partners perform an important advisory role in the Fjord Model by contributing strategic development insight and later stage capital.
Fjord believes that closely aligning the interests of the general partner with the limited partner maximizes return on investment. FCP only charges management fees on funds invested by the general partner, not on total funds committed. This arrangement places incentives on generating exits in the preferred three to five year horizon in a capital efficient manner. The Fjord Ventures general partner will not collect management fees on passive capital.
Fjord Ventures portfolio companies generally fall into one of the following four categories, and are potential investment targets for Fjord Capital: