Paragon plots to raise €350m for Fund II

The firm, which is currently pre-marketing the fund, recently netted a 4x return on a tutoring services business.

Paragon Partners, a private equity firm operating in German-speaking markets, will come to market shortly as it looks to raise approximately €350 million for its successor fund, according to sources familiar with the matter.

The Munich-based firm, which was founded in 2004 by former Triton executive Edin Hadzic, is currently in a pre-marketing phase, the sources said. Paragon did not respond to a request for comment at press time.

Paragon targets companies with an “attractive market outlook, a sustainable business model and value creation opportunities”, according to its website. It is understood the firm can invest in both leveraged buyouts as well as distressed situations.

Paragon Partners I closed on €220 million in 2008. In October, it sold a stake in Schülerhilfe, a tutoring services business for school students in Germany and Austria to Deutsche Beteiligungs. This exit generated a 4x gross return and 41 percent IRR, according to a Paragon statement.

Investors in Fund I included Access Capital Partners, AlpInvest Partners, Goldman Sachs Asset Management, HarbourVest Partners, Industriens Pension, LGT Capital Partners and Unigestion, according to PEI’s Research and Analytics division.

Paragon joins a number of other firms which are currently raising capital for the German-speaking market. CapVis Equity Partners is understood to be near a final close of €700 million for its Fund IV. The firm, which came to market in February targeting €600m, held a first close in the summer. CapVis did not respond to a request for comment at press time.

Meanwhile EMERAM, a German spin-out from The Riverside Company, is aiming to collect €350 million for its debut fund. The firm has secured more than half of its target, according to a source familiar with the matter. UBS is understood to be raising that fund. UBS declined to comment while EMERAM did not respond to a request for comment at press time.