Permira raises EUR 16.7bn for Fund VIII, 50% up on previous vintage

Harriet Matthews
08 March 2023

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UK-headquartered sponsor Permira has held a final close for its eighth buyout fund, Permira VIII, on EUR 16.7bn, surpassing its EUR 15bn target.

Its 2019-vintage seventh fund held a final close on EUR 11bn against a EUR 10bn target. The vehicle was 83% deployed as of March 2022, according to Unquote Data.

Permira VIII was launched in 2021 with a EUR 15bn target, according to Unquote Data. The fund held a first close in mid-2022 on USD 16bn, according to Bloomberg.

The new vehicle will see the GP aim to meet fund-level targets around ESG and sustainability, focusing on climate, gender diversity and governance. It is an Article 8 fund under the EU SFDR, a source familiar with the situation told Unquote.

Permira declined to comment.

The GP held a final close for Permira Growth II in December 2021 on USD 4bn, surpassing its USD 2.5bn target.

Multi-billion fundraises from European private equity managers have been scarce in recent months, according to Unquote Data. Nordic Capital's EUR 9bn final close for its 11th buyout fund in October 2022 is the largest recorded for a European manager in the past six months.

Permira's fresh final close also gives an indication of the overall health of fundraises by managers with a focus on Europe. The capital raised for Permira VIII is almost equal to the EUR 18.5bn already raised by European buyout managers across six first and final closes in the year to date, according to Unquote Data. Although this amount is almost equal to the EUR 18.4bn raised in the first two months of 2022, it also reveals an 80% fall in the number of first and final closes.

The outset of both this year and last have failed to come close to the EUR 49.8bn raised through 20 first and final closes in the first two months of 2021, which marked a 52% increase in aggregate value versus 2020 but a volume decrease of one third.

All signs continue to point to a market in which the largest managers seeking international pools of capital are still able to raise funds, but smaller managers are struggling to get a look-in, accounting for the drop in volume.

Investors
Permira VIII had a 90% re-up rate from LPs, according to the press release. It also saw more than 50 new investors join its LP base.

The fund is backed by public and private pension funds, sovereign wealth funds, endowments and foundations, institutional fund managers and family offices of entrepreneurs. These include Cathay Life Insurance, as well as pension funds Oregon Investment Council, the New York City Fire Department Pension Fund, and the Minnesota State Board of Investment.

Institutions including the Canada Pension Plan Investment Board (CPPIB), DanCap Family Office and ICG Enterprise Trust made commitments to Permira VII, according to Unquote Data.

Investments
The fund will follow the same strategy as its predecessor vehicle, which deployed equity tickets of EUR 250m-1bn, the same source told Unquote. It will focus on the technology, consumer, healthcare and services sectors, aiming to back businesses with long-term, structural and resilient growth.

Its portfolio currently comprises four companies: UK-based cybersecurity platform Mimecast, which it acquired in a USD 5.8bn take-private in December 2021; US-based customer service software Zendesk, which it acquired alongside Hellman & Friedman in a USD 10.2bn take-private in June 2022; US-based financial data business Reorg, which it bought in August 2022; and UK-based financial services intelligence firm Acuity Knowledge Partners, which it bought from Equistone in January 2023.

Permira's seventh fund holds investments in businesses including Norway-based online classifieds platform Adevinta, which it backed in 2021; it also invested in Italy-based fashion retailer Golden Goose in February 2020, acquiring the company in a EUR 1.28bn SBO from Carlyle.

People
Permira – Kurt Björklund (managing partner).