PAI nears €3bn final close for sixth fund

The fund held a €1.4bn first close in January last year and has already made six deals.

In April last year the vehicle made its maiden investment by acquiring a majority stake in Euro Media Group, a French provider of TV and film facilities and services for around €200m. Two months later, it backed an MBO for VPS Holdings, the European division of TDR Capital portfolio company VPS Acquisitions; it also took a majority stake in DomusVi, a French operator of nursing homes and related services.

In October 2013, PAI chairman and CEO Lionel Zinsou stated that the fundraise was going according to plan, with more than €1bn in commitments already received at the start of Q3 that year. Zinsou added that he had been surprised by the appetite displayed by insurers and banks.

The firm began fundraising in the spring of 2013 after an intense pre-marketing effort. PAI had raised €5.4bn for the fund's predecessor in 2008, but internal controversy sparked by the arrival of Zinsou resulted in the departure of key partners Bertrand Meunier and Dominique Mégret.

This triggered a key-man clause on the 2008 fund, which was ultimately halved to €2.7bn. In the end, extra concessions on fees and corporate governance swayed two-thirds of investors in the fund to support the restructuring and to restart the shrunken fund, according to unquote" coverage at the time. PAI was said to have agreed to pass on 100% of fees to LPs, with the exception of its management fee.

PAI has been on the mend since then and took advantage of improved conditions in 2011 to kickstart a hefty divestment effort, returning in excess of €5bn to investors. These exits included the sale of Kwik-Fit to Japanese trade buyer Itochu for £637m, followed by the divestment of Yoplait, which generated a 10x money return. The buyout house then sold French mortgage insurance services company Compagnie Européenne de Prévoyance to JC Flowers for around €850m, reaping a hefty 16x multiple.

Zinsou is to step down this year as the private equity house draws up its succession plans.

PAI declined to comment on the progress of its fundraising.

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• Topics
• Buyout
• France
• PAI Partners
• France
• Unq2015Feb