PSG closes debut European fund on €1.25bn

Alessia Argentieri
02 February 2021

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PSG has closed its inaugural European fund, PSG Europe, on its тЌ1.25bn hard-cap.

The fund was launched in November 2019 with a €1bn target and held an interim close on €783m in November 2020.

PSG Europe is managed by a team of 22 investment professionals based in London, advising on fund investments in European growth-stage and lower-mid-market software and B2B services companies.

The firm's investment strategy focuses on partnering with management teams to scale businesses through organic and inorganic growth.

Established in 2014 and headquartered in Boston, Massachusetts, with offices in Kansas City, Missouri, and London, PSG was formerly the growth equity arm of asset management firm Providence Equity Partners and has subsequently become an independent entity. Since its inception, PSG has backed more than 65 companies and supported 275 add-ons.

This final close brings PSG's aggregate capital commitments across the US and Europe to more than $5bn.

Investors
The fund, which was oversubscribed, received commitments from existing and new investors, including state pension funds, sovereign wealth funds, family offices and high-net-worth individuals.

Investments
PSG Europe invests in lower-mid-market software and technology-enabled services companies. It deploys equity tickets from €5m up to €100m, and targets companies with revenues of €10-50m that are either profitable or have a clear path to profitability.

The fund's portfolio currently consists of companies with operations across 14 countries, specialised in digital software applications across different sectors of the economy.

To date, the fund has completed seven platform investments as well as 12 add-on acquisitions.

Its portfolio includes IT security business Hornetsecurity, which has recently acquired Altaro; automotive software developer Imaweb, which last week bolted on German company Procar; Nordic HR software provider Sympa; and Spanish e-signature specialist Signaturit.

"The highly fragmented European market presents a significant opportunity for our firm," said Dany Rammal, managing director and head of PSG Europe. "The strength of our deal-sourcing and operational capabilities mean that we are well positioned to partner with founders and entrepreneurs to help them grow their businesses into leading pan-European software champions."

He added: "We look for software and technology-enabled B2B companies that have strong or market-leading positions in large, fragmented sectors. Often there is an opportunity to take single-solution, single-country companies and create continental leaders through organic go-to-market acceleration and strategic acquisitions. These opportunities exist across a broad range of sectors and sub-sectors, and we're looking at opportunities across Europe."