PAI Mid-Market Fund closes on €920m

This is the firm's first vehicle entirely dedicated to investing in mid-market companies across Europe.

The fund was launched in January 2020 to complement PAI's existing large-cap strategy, and held a €500m first close in October 2020. It has surpassed its original €700m target and €800m hard-cap, which was increased following significant investor interest.

The fund is co-led by PAI partners Raffaele Vitale and Stefano Drago, alongside Mateo Pániker Rumeu, who joined the firm from Ventura Equity Partners. Pániker Rumeu previously spent approximately 12 years as senior principal and member of the investment committee at Investindustrial, working from the firm's Spanish office.

PAI is currently investing its seventh fund, PAI Europe VII, which hit its €5bn hard-cap in March 2018. The fund invests in European companies operating in a variety of sectors, including business services, consumer, industrials and healthcare, with enterprise values of €300m-1.5bn. It deploys equity tickets in the €150-400m range and plans to make 15‐17 investments.

In addition, PAI transferred the two remaining assets of its fifth fund – Froneri and Marcolin – to a new vehicle, realising liquidity for the firm and some of its LPs. The new vehicle is called PAI Strategic Partnerships and is roughly €2bn in size; it has a five-year term with the possibility of two one-year extensions. Lead investors include AlpInvest Partners, Goldman Sachs Asset Management and HarbourVest Partners.

Investors
PAI Mid-Market Fund received strong commitment from PAI's existing investor base, as well as new LPs joining the platform. A source close to the situation told Unquote that approximately one third of the investors are new LPs.

The capital commitments were received from a total of 50 investors, including a broad range of institutional investors, primarily public and private pension funds, sovereign wealth funds, insurance companies and family offices across the globe.

Investments
The vehicle invests in companies with enterprise values in the €100-300m range that operate in the business services, consumer, healthcare and industrial sectors in Italy, Spain, Germany, France and the Benelux region. It deploys tickets of €50-150m and pursues buy-and-build strategies aiming at supporting its portfolio companies' market consolidation and international expansion.

A source close to the situation told Unquote that the fund plans to invest in approximately 12-13 companies.

The fund has already made three investments, backing Paris-listed orthopaedic implant specialist Amplitude Surgical; Spanish seafood producer Angulas Aguinaga; and French online flowers and gifts retailer MyFlower (Interflora).

The fund is currently 22% invested, a source close to the situation told Unquote.

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