UK private equity firm Permira is scaling back its fundraising ambitions from boom-era levels, with plans to return to market this summer.
According to the Financial Times, the firm is to raise a €6.5bn fund, which stands to be one of the largest raised in Europe since the downturn, but represents a cut of a third compared to its €11.1bn 2006 fund.
The move reflects a drop in appetite for large buy-outs in light of the mixed performance of some of the largest deals in the wake of the financial crisis. Permira is said to be pegging deal sizes at between €500m and €3bn.
Permira itself has had to write off stakes in several of its portfolio companies, including chemical manufacturer Borsodchem and gambling company Gala Coral. The firm has also cut the value of its stake in Freescale Semiconductor, which was taken private for $17.6bn in 2006, following the company’s public listing last month.
Fellow UK firm Terra Firma is also retrenching from mega buy-outs, back to its historical comfort zone of €250m – €500m equity per deal. According to chairman Guy Hands, the firm’s next buy-out fund is unlikely to exceed €3bn – almost half the €5.4bn raised for its 2007 vehicle.
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