Permira seeks to minimise fund shrinkage

LPs who do not want to reduce their commitment to Permira IV have been invited to put more money in, with the incentive of no management fees on any extra commitments.

Buyout house Permira has offered its more liquid LPs the chance to increase their commitments to Permira IV on favourable terms in addition to allowing cash-strapped LPs to limit cap their commitments.

Yesterday Permira confirmed that 10 percent – or around 18 – of Permira IV’s 180 limited partners had accepted the manager’s offer to cap their commitments to the fund at 60 percent.

As a result the €11.1 billion fund should be reduced to no less than €9.6 billion, the firm said in a statement.

In order to compensate for some of the commitment reductions, however, LPs with appetite for more exposure have been invited to increase their commitment, with the incentive of paying no management fees on any new money.

LPs have until “early next year” to register their interest, but it is too early to judge the appetite among LPs for increased commitments, said a source close to the process.

Permira declined to comment on the likely take-up of the offer.