Schroder Venture Europe becomes Permira

Schroder Ventures Europe, the private equity firm, has taken a new name for itself. In the hope that a name change will better reflect the business’ international focus and independent status, the group now wishes to be called Permira, the Latin word for “very surprising, very different.”

The name change signifies the group’s independence from Schroders. For many private equity businesses, born from leviathan financial corporations, independence is important because it enables the group to branch out and allays any fears investors may have over situations where conflict of interests may arise.

Last week, Guy Hands, the former head of Nomura Principal Finance Group, reached an agreement with Nomura as to how he might operate independently as Terra Firma Capital Partners. This was alleged to have been prompted by Nomura‘s reduced appetite for carrying the whole of the Principal Finance Group‘s investing on its own balance sheet.

Permira has gained a reputation for deal making away from the investment bank-led auction process. An example is the successful Charles Vögele transaction, where no other private equity firms were involved in the flotation of the Swiss retailer on the Frankfurt and Zurich Stock Exchanges.

The group will be owned by its partners and will work with Schroders where suitable opportunities arise, said the group. Permira’s team of 100, based in Frankfurt, London, Milan, and Paris, advise funds with committed capital of E6bn. Returns on the group’s 1997 $1bn fund, now called Permira Europe I, showed an internal rate of return of 99.3 per cent at the end of last year. The E3.5bn fund raised last year is about one third invested.

In related news, Permira is one of three private equity firms buying Cognis, the speciality chemicals arm of German company Henkel.

In the largest European private equity deal this year, Permira, GS Capital Partners, the PE firm of Goldman Sachs, and Schroder Life Sciences, are expected to pay E2.5bn for the unit, E100m less the original asking price made earlier this year. Despite this drop the deal is Germany’s largest leveraged buy out to date and one of the largest private equity deals buy outs in the chemicals industry, according to Richard Sharp, managing director of Goldman Sachs International.

As part of the deal, Henkel is lending Schroder Ventures and Goldman Sachs Capital Partners E350m to help offload its under-performing business. Cognis recorded sales of E3.2bn last year, which amounted to 23 per cent of Henkel’s total.

Henkel and a number of its rivals including Degussa, BASF and Bayer are all expected to release lower than expected third quarter results. It is anticipated Henkel will report a 1.6 per cent fall in pre-tax profit to E197m for the three months ended 30 September.