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Permira drops fundraising target amid new fundraising extension

6 Mar 2013

rsz_252px-common_face_of_one_euro_coinEuropean buyout house Permira has reportedly slashed its fundraising target by about a quarter amid a decision to push its first close back for a second time.

The buyout house is now eyeing between €4bn and €5bn for Permira V according to the Financial Times, which said the firm had informed investors of the drop from its initial €6.5bn target.

A letter to investors in November 2012 revealed the scale of the problem Permira was facing, admitting it had only received about €2bn of commitments after nearly 18 months on the road.

It said at the time it was giving investors two more months to commit ahead of a re-scheduled first close in March, but has now pushed that back to April, according to the FT report.

The newspaper added Permira also planned to continue fundraising until April 2014, which would mean the fund will be on the road for almost three years.

Permira anticipated a tricky fundraise amid the global financial crisis when it launched its fifth fund in 2011, aiming for a target well below the €9.6bn it collected for its previous vehicle in 2006.

The slow pace of Permira’s fundraise comes despite reports it had attempted to sweeten the deal for LPs by offering a  management fee discount for early investors, or those pledging more than €200m.

Similar offers were also run by competitors Cinven and BC Partners to draw in investors wary of risky asset classes in the wake of the global downturn.

But Cinven raised €3bn of its €5bn in just six months, while BC hit its €6.5bn hard cap for European Fund IX in February.

Permira V is expected to continue a strategy of predominantly targeting mid to large European buyout deals.

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