Palamon Capital Partners, a European mid market private equity firm, has held a final closing of its second fund, Palamon European Equity II , with commitments worth €670 million ($853 million).
It had originally targeted €650 million.
The new fund is more than 50% larger than the firm’s €440 million debut fund, allowing it to expand its “equity for growth” investment strategy. It will typically take control positions through multiple tranches of investment, totaling between €10 million to €80 million, in mid-market businesses in services sectors.
Palamon’s first fund made 15 investments in seven countries and has returned more than 90 percent of the capital invested through six exits while continuing to hold nine companies. It made six times its original investment on its sale of TeamSystem, an Italian IT company, last year.
The second fund has already committed €84 million to three portfolio companies: Loyalty Partner, a German, multi-partner loyalty programme operator; Espresso House, the largest chain of branded coffee bars in Sweden; and cadooz, a rapidly growing German marketing services company.
A total of 30 investor groups, including both new and returning limited partners, have invested in Palamon II. Among the returning partners are the Washington State Investment Board, Oregon Public Employees Retirement Fund, Morgan Stanley Alternative Investment Partners and Pennsylvania SERS.
New investors include AlpInvest, Chubb Insurance, the Irish National Pension Reserve Fund, the Church Pension Fund and Macquarie Global Private Equity Fund.