Permira Advisers LLP’s efforts to attract investors to its latest leveraged buyout fund are picking up speed after the firm initially struggled to find backers, three people with knowledge of the talks said.
The firm is in discussions with two U.S.-based institutions ready to commit as much as $200 million each for its fifth pool, Permira V, said the people, who asked not to be identified because the talks are private. Permira may now hit its 5 billion-euro ($6.7 billion) target as soon as January, three months before its April deadline, the people said.
Permira, which has stakes in Hugo Boss AG and German broadcaster ProSiebenSat.1 Media AG, had found it hard to attract capital after its previous pool, an 11.1 billion-euro fund raised in 2006, tumbled in value following the financial crisis. As stock markets rebounded in the past 24 months, the valuation of the fund has climbed. London-based Permira now values the fund at 40 percent more than the initial cost of the investments, according to documents seen by Bloomberg.
The firm spent 18 months marketing its latest fund before holding an initial close in April 2012 at 2.2 billion euros, allowing it to start spending the money. Private-equity firms typically take eight months to hold a first close, while the average gap between that point and completing the fundraising is 14 months, according to data provider Preqin Ltd.
Officials at Permira declined to comment on the fund.
Private-equity firms typically pool money from pension plans and endowments with a mandate to buy companies within five to six years, then sell them and return the money and a profit after 10 years. The firms usually charge a management fee of as much as 2 percent and keep 20 percent of the profits from investments.