Providence closes $4.25bn fund

The Rhode Island-based buyout group’s fifth fund, which attracted almost $9 billion in potential LP commitments, will continue to invest in media and communications companies.

Providence Equity Partners has announced the close of its fifth fund on $4.25 billion (€3.45 billion).

The new fund, which far surpasses Providence Equity’s previous $2.8 billion (€2.27 billion) fund closed in 2000, will continue to invest in media and communications companies. The new fund brings Providence Equity’s total assets under management to more than $9 billion (€7.31 billion).

As first reported a couple weeks ago in the weekly e-mail from PrivateEquityOnline.com, the new fund drew roughly $9 billion (€7.31 billion in would-be LP interest, according to one investor. Providence Equity did not organize anything resembling a formal road show or hire a formal PPM for its fifth fund, and even went as far as to reject previous investors for its latest entity.

The fund closing comes right on the heels of Sony’s $3 billion (€2.4 billion) buyout of Hollywood studio Metro-Goldwyn-Mayer, in which Providence took part alongside buyout shops Texas Pacific Group and DLJ Merchant banking Partners. Simultaneously, the winning consortium announced a deal by which MGM’s vast library of content, as well as Sony Picture’s assets, will be distributed over the pay-per-view platform of cable television giant Comcast, which will manage the joint venture.

Providence, Rhode Island-based Providence Equity, led by chief executive officer Jonathan Nelson, has been involved in some of the media world’s biggest buyouts. In May, the firm joined The Blackstone Group in purchasing California’s Freedom Communications, the publisher of The Orange County Register, for a reported amount of between $1.5 billion (€1.25 billion) and $2 billion (€1.67 billion). Providence made that investment out of its $2.8 billion Fund IV.

In April, Providence joined Kohlberg Kravis Roberts in the acquisition of satellite operator PanAmSat in a deal worth $3.55 billion (€2.98 billion).

This month, Providence Equity also hired Gustavo Schwed as a managing director in its London office. Schwed joins the firm from Morgan Stanley Capital Partners, where he was a partner responsible for European private equity.