PAI shatters hard-cap with €3.3bn fund close

PAI Partners has held a final close on its sixth European buyout fund on €3.3 billion, above its initial hard-cap of €3 billion.

In January PAI hit its €3 billion hard-cap and returned to investors to seek an increase to the oversubscribed vehicle in order to satisfy investor demand, Private Equity International reported at the time.

PAI Europe VI came to market in early 2013 and held a €1.4 billion first close in January 2014. The vehicle then held a second close of around €2.5 billion last summer, and had amassed around €2.8 billion by November.

Rede Partners acted as placement agent for the fund.

The investor base includes public and private pension funds, sovereign wealth funds, insurance companies and high net worth individuals. Around 60 percent of commitments come from Europe, with 20 percent from North America, 15 percent from Asia and five percent from the Middle East and Latin America, according to a statement from the firm.

Returning institutional investors increased their allocation by an average of 30 percent compared to PAI Europe V, the firm said.

To date PAI Europe V has returned around 50 percent of its capital to investors at an average of 2.4x money, according to a source familiar with the matter. The firm has made 10 exits since 2011, returning around €7 billion to its investors at an average money multiple of 3.5x, the source said.

PAI has secured a number of exits recently. In November the firm, alongside The Blackstone Group, sold international biscuit maker United Biscuits to Turkish food manufacturer Yildiz Holding for more than £2 billion (€2.56 billion; $3.2 billion), generating a 3.7x return for its 2005-vintage, €2.7 billion PAI Europe IV.

In June PAI sold its stake in duty free travel retailer Nuance Group to rival global travel retailer Dufry for CHF 1.55 billion (€1.27 billion; $1.73 billion), netting a 3x return, and in late 2013 the firm partially exited its share in IT services company Atos in a deal generating more than 2x money.

PAI has already made six investments from Fund VI, including French nursing home business DomusVI, which it acquired in June, and Custom Sensors & Technologies, a business unit of French-based Schneider Electric which it acquired alongside The Carlyle Group in a $900 million deal. PAI also purchased Labeyrie Fine Foods (LFF), a French food business, from Paris-based buyout firm LBO France in a deal worth €590 million.

“The pipeline of investment opportunities is particularly rich at the moment, reflected in Fund VI’s first deals and we are confident that we can continue to deliver outperformance to investors in the current climate,” PAI partner and chief investment officer Michel Paris said.

PAI typically acquires majority stakes in medium to large-sized European companies in the business services, food and consumer goods, general industrials, healthcare and retail & distribution sectors. It writes equity tickets of between €100 million and €300 million.