University of Michigan commits €15m to Permira

The school’s Board of Regents pledged to the global buyout fund that is targeting between €4bn and €5bn.

The University of Michigan’s Board of Regents committed €15 million to Permira Advisers’ fifth fund in March, according to documents released before the board’s Thursday meeting.

In April, Fund V held its first close on €2.2 billion, after 19 months of fundraising. The total amount raised includes a €200 million GP commitment, Private Equity International wrote earlier. 

Permira declined to comment. 

UK-based Permira began marketing the fund in September 2011, with an initial target of €6 billion. The fund has struggled to attract LPs because its prior vehicle suffered from a series of write-downs post-financial crisis, a source familiar with the fund told PEI earlier. But Permira offered early-bird discounts to LPs willing to commit before Fund V’s first close. The source added that this fund’s LP base is more diverse than Fund IV.

Permira’s fourth vehicle, a 2006 vintage, raised €11.1 billion, but was scaled down to €9.6 billion. The fund’s valuations were up 10 percent during this year’s first quarter and the fund was valued at 1.34x cost as of April, according to a source familiar with the fund. 

Permira’s fifth vehicle will invest in mid- and large-cap European companies. The firm will acquire majority stakes in most situations, but also will consider take-private transactions, the University of Michigan statement read. It will focus on sectors including technology, healthcare and financial services. The firm has private equity offices across Europe, including London, Paris and Stockholm, according to the statement. 

University of Michigan: an $8.4bn fund

The $8.4 billion endowment had allocated about 15 percent, or $1.2 billion, to private equity investments, as of 31 March, according to statements from the school. Earlier this summer, the University of Michigan authorised a $20 million commitment to Blue Water Capital—a two-year old private equity firm whose maiden fund closed in May. The fund reached its hard-cap of $861 million, PEI previously disclosed. 

The Board of Regents’ other recent commitments include Silver Lake Partners IV and Huron Capital Partners