Permira holds €2.2bn first close for fifth fund

Ellie Pullen
25 April 2013

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Permira has raised тЌ2.2bn for its fifth buyout fund so far, just a third of the vehicleтs original тЌ6.5bn target.

Permira launched its Permira V fund, which has a 10-year lifetime, in September 2011. In March of this year, the firm announced a cut to the fund's target, lowering it to €4-5bn.

Permira's fourth fund, Permira IV, which was launched prior to the financial crisis, closed on a significantly higher amount. Announced in March 2006 with a €8.5bn target, the fund went on to hold its first close on €10bn in July of that year. The vehicle then closed on €11bn in September 2006. Following the onset of the financial crisis, Permira was however forced to scale this amount back to €9.6bn in 2008.

The GP last night told investors in Permira V that the fund will start sourcing opportunities immediately in what the firm considers "a highly interesting environment with a declining supply of capital in an increasingly target-rich marketplace."

Investors
The fund has received commitments from 30 LPs so far, including previous investors in Permira funds. LPs that came in at first close benefited from a discount on management fees.

Permira committed €200m of personal capital to the fund in a bid to reinforce alignment of interest. SVG Capital, a UK-based fund-of-funds manager which committed €2.8bn to Permira IV before scaling back its contribution in 2008, invested €100m in the vehicle.

Permira V saw an increase in contributions from Asian investors compared with the GP's previous funds, resulting in a fairly even split between investors from Europe, Asia, US, the Middle East and the rest of the world.

Investments
The fund will focus on the large-cap market, reportedly investing in companies with an enterprise value of €500m-3bn. Permira's typical equity ticket has hovered around the €250m mark post-financial crisis, a strategy expected to remain in place for Permira V.

The firm typically aims to make 15-20 investments per fund, deploying €1-1.5bn of equity each year.

People
Kurt Björklund and Tom Lister are co-managing partners at Permira.