PAI Europe VII closes on €5bn hard cap

PAI stated that the fundraising was completed in less than three months of active marketing and had a demand of over €15bn. 

The fund has significantly surpassed its predecessor, PAI Europe VI, which closed on €3.3bn in March 2015, according to Unquote Data.

Last year saw PAI completing eight exits with €3.5bn of proceeds including four at approximately 3x MOIC. Realisations in the past year have included sales of lab specialist Cerba Healthcare, industrial supplies distributor IPH, nursing home operator DomusVi, airfield guidance system specialist ADB Safegate and equipment rental company Kiloutou.

PAI used London-based placement agent Rede Partners for the raise.

Aggregate commitments across all funds raised by PAI currently total more than €16bn.

Investors
PAI Europe VII has benefited from re-commitment from existing investors, in addition to backing from new investors joining the platform.

It was a priority to for the firm to increase the percentage of international LPs committed to its funds, Unquote understands. 

Public and private pension funds, sovereign wealth funds, insurance companies and family offices from Europe, the US, Canada, Asia, the Middle East and Latin America have invested. Approximately 26% of capital came from investors in the US and Canada, 50% from Europe and 17% from Asia. 

US pension funds backing the fund include Washington State Investment Board, the Los Angeles County Employees Retirement Association, the Pennsylvania Public School Employees Retirement System, and the Teacher Retirement System of Texas. The first three made commitments of more than €100m each to the fund, according to Unquote Data. Canadian pension fund Public Sector Pension Investment Board also backed the vehicle. 

A handful of Asian sovereign wealth funds, including the Malay Khazanah Nasional Berhad, committed to the vehicle.  

Investments
The new fund will acquire controlling stakes in LBOs across Europe, with a specific focus on mid- to large-cap deals. It will focus on transactions with enterprise values of €300m-2bn, with the sweet spot being just less than €1bn. The GP will invest equity tickets in the €100–400m range. It has a geographic bias towards western Europe. PAI concentrates on five main sectors: food & consumer, business services, healthcare, general industrials and retail & distribution.  

PAI disclosed to Unquote that no investments have been completed yet via PAI Europe VII, as its predecessor is 85% deployed and should complete one more transaction in Q2 2018. 

The GP plans to arrange several co-investments with LPs via its latest vehicle. A spokesperson from PAI disclosed that of the predecessor fund's investments, 40-50% were co-investments, and the GP expects PAI Europe VII to replicate this strategy.

People
PAI Partners – Michel Paris (CEO); Richard Howell (partner, head of the investor team); Ivan Massonnat (partner). 

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