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How private equity funds move in mysterious ways


This article is written without source reference in the text because it meant to be read by all. Sources are at the bottom of the text block, and financial expressions explained before. It is part one of a longer article that will be published shortly.

Norwegians have NOK 100 billion in debt collection, which is rising dramatically due to the Coronavirus. It will hit those at the bottom of society first and who have the lowest income. The Debt Collection Act not reviewed, however, certain ethical principles that debt collection companies violate according to section §8 of the Good Debt Collection Act. In 2014, Nordic Capital bought the majority of Lindorff (credit management services) the goal was to establish itself as a global player. Today, Lindorff is Norway’s most significant financial debt collection agency, but only after the EU Commission approved certain conditions.

In June 2017, the financial merger approved under the terms of the sale of Lindorff’s operations in Denmark, Estonia, Finland and Sweden and Intrum Justitia’s operations in Norway. It merged into one new company Intrum. Lindorff is owned by Swedish Intrum, which after the merger is the leading European company in the Credit Management Services sector. Intrum’s head office is in Stockholm, has 9,000 employees and in 2018 had a profit of EUR 1320 million (NOK 14.2 billion). The exciting thing is the company that bought Lindorff in 2014, the Jersey-based company Nordic Capital.



Who is behind Nordic Capital?

 Nordic Capital founded by Robert Andreen and Morgan Olsson in 1989, the boys placed their first fund in 1990 with a capital base of EUR 55 million, in the island of Jersey for tax reasons. The next seven funds and the last 2018, with a capital base of EUR 4300 million. Nordic Capital has just 140 employees managing almost EUR 17,000 million (approximately NOK 180 billion) in the tax haven of Jersey. They have been heavily criticized by several teams, in 2013, the three top Robert Andreen, Morgan Olsson and Bo Söderberg took dividend of SEK 2.8 billion from Nordic Capital. However, the dispute with the Swedish Tax Directorate won in the original judgment of the Administrative Court. Besides, the Directorate of Taxes had to pay Nordic Capital costs of SEK 5 million, according to SvD.


Nordic Capital Size of fund year (EUR million)

  • Fund I 1990: EUR 55 million
  • Fund II 1993: 110 EUR
  • Fund III 1998: EUR 350
  • Fund IV 2000: EUR 760
  • Fund V 2003: EUR 1,500
  • Fund VI 2006: EUR 1,900
  • Fund VII 2008: EUR 4,300
  • Fund VIII 2013: EUR 3,500
  • Fund IX 2018: EUR 4,300

The 2008 financial crisis the disaster that started it all

When the financial crisis hit the global markets in 2008, few expected to benefit from it. But for the investment-hungry fund managers in Nordic Capital, the crisis proved to be a gateway to a new and exciting industry: financial services. Nordic Capital had seen glimpses of the financial sector before deciding to enter the industry created as a private equity fund, super-sensitive to excellent investment opportunities in financial services. Nordic Capital failed to fully grasp until the disaster occurred in 2008 with the US financial crisis. The potential was to recover debt for creditors, and when the crisis came, there were many victims. History tends to repeat itself

Why set-up private-equity fund on the island of Jersey?

The history of Jersey variegated; the island is closer to France than the United Kingdom. It gained a distinctive status as a kingdom 1204 when King John lost the Duchy of Normandy to France, he lost most but retained Jersey, Guernsey, Alderney, Sark, Herm, plus various rocks, reefs and islets, collectively known as the Channel Islands. Nordic Capital utilized this in 1987 to avoid tax, VAT on companies including companies outside of Jersey, and they are not alone.

In the 1950s and 60s, the world severely limited the flow of money. British politicians blamed economic speculators for the 1930s depression and had introduced capital controls to prevent something similar from happening again. The pound was therefore strictly taxed in the UK, the tax high and the inheritance tax for the richest approx. 80% of the inheritance over € 1.11 million (NOK 13 million) to the government in 1970. Today’s value, the amount is very high with the inflation rate in the UK of 5.53% annually equalling € 148 million (NOK 1.5 billion).

In the 1970s, Jersey turned into a tax haven for riches, banks and credit institutions

A trick now forgotten found the island Jersey had a great business opportunity, there was no inheritance tax. The ethical aspect is doubtful, but it was not ethics that they dropped the charge. If wealthy Britons invested their millions in Jersey tax could not take most of the crown. The money flowed in because if it planned thoroughly, no fee paid at all. The most prosperous people, therefore, started moving out and very quickly after banks and credit institutions.

It completely transformed the island. Bankers and tax exiles moved into communities and pushed up prices on property and services. The talks from the City of London (the stock market in London) moved to the most unlikely place, the small island of Jersey.

No tax on corporate profits even if the business is outside of Jersey

Who would pay tax on profits in London when you could do it in Jersey?” you could hear the locals spoke. And the small island between the United Kingdom and France changed tremendously, especially in the early 1970s as the big players began to establish themselves. There is no inheritance tax; no VAT; no capital gains tax; no tax on corporate profits if the business is outside of Jersey.

Today, the range of banks is dominant

Today, the offices of the major players form a glass wall along the boardwalk to Jersey’s capital, St. Helier: Credit Suisse, Citi, HSBC, Société Générale, PWC, and move an insanely high capital base. In 2007, the population of Jersey was 100,000, with € 245.29 billion in deposits, besides, managed € 246.41 billion and several hundred billion in trust funds (Trust Fund). The financial sector surplus in 2007 was over GBP 1.11 billion, unemployment was just under 1%, and gross national income per person was significantly higher than in the UK and the US


Comes the Tax Paradise Jersey’s fall

Financial dictionary

Hedge funds
  • A hedge fund is a private, loosely regulated, aggregate investment fund managed by an individual or business for the benefit of the wealthy clients who contribute capital to the fund. Hedge funds usually have a wide range of investment strategies, and many originally intended to protect a portfolio of stocks from the risk of significant market downturns. Alfred W. Jones, American writer and financial journalist, is credited with creating the first hedge fund.
Private Equity Fund (Private Equity Fund)
  • Private equity companies invest in businesses intending to increase value over time before eventually selling the company with profits. Capital is raised from limited partners to invest in promising private companies or sectors. In larger companies, a bankruptcy court cannot protect shareholders if the liability is so high that it does not allow for capital liability coverage. It is unlikely that anyone, except those filing new lawsuits, will get the investment back. In some cases, they will receive full compensation, while creditors and other victims will receive little or nothing of contributed capital. However, if the court accepts strategic use of the Bankruptcy Act, small odds usually no injured party or creditor will be fully reimbursed. In both cases, shareholders are likely to lose both equity and future dividends.
Trust Fund and Trustee
  • A duty of trust requires that you submit to all personal interests while acting for the benefit of another person. That is the highest duty implied by law.

Sources and Useful Information


1. Lindorff about lindorff.com
2 Financial figures Intrum.com 
3 Lindorff and Justitia combination archive.org (offline log in)
4 Nordic Capital business cases. Qvartz.com
5 Chapter III. The general clause on good collection practice §8 
6 Swedish Tax Directorate vs Nordic Capital 2013
8 The economy of Jersey and the fall, The Guardian
9 Inflation, what is the capital value of 1970 today? inflationtool.com  The inflation rate in the UK between 1970 and 2020. 1,245.61%, as a total increase from £ 11.3 million in 1970 equates to £ 148 million in 2020. The average annual inflation rate is 5.23%.
10 The Quest for a Divided Welfare State: Sweden in the Era of Privatization Authors John Lapidus 2019 Palgrave Macmillan
11 Global Unions: Challenging Transnational Capital through Cross-Border Campaigns editor Kate Bronfenbrenner 2007 first edition published Cornell University History
12 Hedge Fund What is it? Encyclopedia of Business Ethics and Society editor Robert W. Kolb. Published 2008 Sage publishing
13 Private equity fund What is it? pitchbook.com 


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