Providence Equity Partners Inc. is seeking as much as $8 billion to invest in leveraged buyouts, according to two people with knowledge of the plan.
Jonathan Nelson, Providence Equity’s founder, is talking with clients to gauge their interest, said the people, who asked not to be named because the discussions are private. The Providence, Rhode Island-based firm expects to begin formal fund marketing later this year, one of the people said.
Private-equity firms gathered $41 billion in the second quarter, the lowest amount since 2003, as endowments, pensions and wealthy individuals hesitated to back new funds, according to London-based research firm Preqin. Investors are waiting for firms to exit deals and distribute profits from existing funds, which have about $469 billion in untapped capital.
“It is clear that the recovery in the fundraising market anticipated by many in the industry has yet to occur,” Preqin said in a July 1 report.
Blackstone Group LP took two years to secure $13.5 billion for its latest buyout fund. The New York-based firm had sought as much as $20 billion when it started marketing in 2008.
Julie Fisher, a spokeswoman for Providence Equity, didn’t immediately return a telephone call seeking comment.
The 21-year-old firm, which focuses on the media, communications and information-technology industries, oversees more than $22 billion in equity investments. It took three months to complete its biggest fund, the $12 billion Providence Equity Partners VI, in February 2007, before the credit crisis froze buyouts.
The value of the Washington State Investment Board’s stake in the sixth fund has fallen about 12 percent, including distributions, according to its website.
Providence Equity has taken steps to exit three deals this year.
It sold a stake in cable-television company Kabel Deutschland Holding AG to the public in March, raising 759 million euros ($998 million) in Germany’s biggest initial stock sale since 2007. The firm sold Kerasotes Showplace Theatres LLC to AMC Entertainment Inc. for $275 million, and Cablevision Systems Corp. agreed to buy its Bresnan Communications Co. for $1.37 billion.
Providence Equity’s largest buyouts include the $15.3 billion takeover in 2006 of Danish telephone company TDC A/S, in which it teamed up with Apax Partners Worldwide LLP, Blackstone, KKR & Co. and Permira Advisers Ltd. It also participated in the acquisition of Univision Communications Inc. in 2007 for $12.3 billion.