Exclusive: Permira closes new fund on €5.3bn

UK buyout firm Permira has deployed more than a quarter of the capital in its soon-to-be-closed new fund after just one year, according to LP sources.

Permira V is set to hold a final close this week on its revised hard cap of €5.3 billion. This total will include a €255 million GP commitment from the manager, with the rest coming from external investors. The fundraising was effectively completed in the first quarter, but the firm has spent the last few months finalising legal agreements.

Permira declined to comment on the news, which was communicated to investors at the firm's annual LP meeting in London last week.

Permira has been deploying the new fund at a rapid rate since holding a first close in April last year on €2.2 billion. It had since completed deals for shoemaker Dr Martens, wealth manager BestInvest, vitamin company Atrium, online legal services provider LegalZoom, agrochemicals business CABB, and remote software company TeamViewer.

In total, it has already deployed almost €1.5 billion of equity across these six investments, equivalent to 27 percent of Permira V. If it continues to invest at the current rate, it could find itself needing to return to the fundraising market in 2016.

The fundraise for Permira V has been a protracted and at times painful process for the firm, spanning almost three years. It first came to market in the autumn of 2011, targeting €6 billion, but struggled to gain traction due to performance issues with the previous fund in the wake of the financial crisis and the issues in the Eurozone. This led to the firm eventually deciding to reduce the target of the fund to between €4 billion and €5 billion in early 2013.

However, as portfolio performance improved – valuations climbed steeply in both 2012 and 2013 – and the easing conditions in the Eurozone allowed Permira to exit some of its holdings and return capital to investors, the firm started to find life easier. The early deals in the fund are also performing well, according to the LP source, helping to bring in new investors since the first close. This has ultimately allowed the firm to beat its revised target (of €5 billion) even while turning capital away.