Statement by the SVCA’s Board of Directors regarding the Supervisory Board’s review of HgCapital Trust plc

27 November 2018

SVCA’s Supervisory Board (the “Board”) published today its decision in a supervisory case regarding a health care and social care corporate group owned by a private equity firm. The Board has reviewed HgCapital Trust plc, hereinafter referred to as the “Company”, based on the SVCA’s Code of Conduct as a result of circumstances and events which have gained attention regarding its previous portfolio company Frösunda Omsorg AB.

SVCA’s Board of Directors notes that the Board’s review has been carried out according to the Code of Conduct (based on the wording of the code applicable during the period of the supervision):

  • Section 4, Overall Responsibility: A private equity firm having a controlling interest in a portfolio company is responsible for the norms of this Code of Conduct being observed in the operations of the portfolio company.
  • Section 5, General Clause: A private equity firm shall, having regard to the objectives stated in Section 3, conduct itself in a manner deserving of public trust.
  • Section 7, Public Functions: A private equity firm investing in sectors of society where business is conducted on behalf of individual citizens, such as education, healthcare and social care, shall act in accordance with generally accepted values. The rights of the concerned shall be upheld, and their interest in a safe and smoothly functioning activity shall be seen to.

SVCA’s Board of Directors welcomes the review carried out by the Board and notes that the Board has concluded the following:

  • The operations conducted by Frösunda during the period of the supervision were subject to such deficiencies that they cannot be said to have protected the rights of those concerned or to have ensured safe and smoothly functioning operations.
  • The deficiencies in Frösunda’s operations during the period of the supervision were systematic and recurring and Frösunda did not correct these deficiencies within the scope of its ordinary operations.
  • In light of this background, the Company had an obligation to act since the Company had a controlling influence over Frösunda.
  • It has not been demonstrated that the Company took the measures necessary to ensure that Frösunda corrected the deficiencies in the operations. Consequently, the Company failed to fulfill this obligation.
  • The Company thereby also did not fulfill its obligation under the Code of Conduct to conduct itself in all of its activities in manner deserving of public trust.
  • The supervision has therefore resulted in criticism being levied against the Company by the Board for lack of compliance with sections 4, 5 and 7 of the Code of Conduct.

The Board of Directors notes that the Board’s supervision has resulted in criticism of the Company. The ownership and management model of private equity firms is fundamentally well-suited for conducting operations on behalf of the public. A precondition for long-term, sustainable portfolio companies is the exercise of active and committed ownership to the greatest extent possible, including responsibility for ensuring that the norms of the code of conduct are complied with in a portfolio company’s operations which, in this case, does not appear to have occurred.

“It is of the utmost importance that owners of operations within the welfare sector act in a responsible and long-term manner. The Company’s actions appear in this case, based upon what has been demonstrated, not to have been in line with what we define as sound active ownership responsibility. This review demonstrates that the Board has an important mission and, even if this review itself cannot lead to any measures by the Board of Directors since the Company is not a member of the SVCA, negative or positive publicity from a weighty body must not be underestimated”, according to Elisabeth Thand Ringqvist, chairperson of the SVCA, in a comment on the Supervisory Board’s review.

Contact persons:

Elisabeth Thand Ringqvist, chairperson of the SVCA, +46 8 678 30 90

Biörn Riese, chairperson of the SVCA’s Supervisory Board, +46 8 345 000

Peter Nilsson, Chief Secretary of the SVCA’s Supervisory Board, +46 70 645 74 52

About the SVCA:

The Swedish Private Equity & Venture Capital Association (SVCA) is the industry body for parties acting in the areas of private equity, buyouts, venture capital and business angels. The association, which was founded in 1985, endeavors to achieve properly functioning supply of capital in Sweden with respect to investments primarily in unlisted companies.

For more information, please visit:

About the SVCA’s Code of Conduct and supervisory board:

The SVCA adopted a Code of Conduct and appointed a supervisory board in 2015. The primary purpose of the Code of Conduct is to ensure public confidence that private equity firms are acting in such a way as to instill public confidence and to ensure that private equity firms, as owners, are acting responsibly and professionally. At the same time, the rules are designed to promote knowledge about which values are controlling for private equity operations.

The supervisory board consists of a chairperson, Biörn Riese, and members Agneta Dreber and Björn Börjesson. Peter Nilsson is the Chief Secretary, assisted by Maria Walter; both of whom work at the law firm Calissendorff Swarting Advokatbyrå.

The fundamental duty of the Supervisory Board is to exercise independent supervision over compliance by private equity firms with the Code of Conduct. The board is authorized to commence a matter following a report filed by the SVCA’s Board of Directors, or on its own initiative, or following a request by a member of the SVCA, or in certain cases following a request by any concerned person.

For more information, please visit: where the board’s decisions are published.