Exclusive: Permira Rounds $2.2 Billion for Fifth Direct Lending Fund
Permira’s debt investment arm raised about 2 billion euros (about $2.28 billion) for its fifth direct loan fund, putting the private equity firm about halfway through its target of 4 billion euros, said a person familiar with the matter.
Permira Credit Solutions Fund V will primarily provide debt financing to medium-sized European companies with an annual EBITDA of EUR 10-75 million. It will focus on sponsor-backed businesses based in the UK and Western European countries.
Investors have poured money into the booming private credit market recently as they seek higher yielding assets in a low interest rate environment. Funds with a direct lending strategy raised more than $33 billion in mid-2021, the latest available data, compared to $43.4 billion for all of 2020, according to the Global Private Debt Report. from PitchBook.
Permira is expected to wrap up fundraising by the end of the year for its new direct lending vehicle, which has a hard cap of €5 billion, the person said. A Permira spokesperson declined to comment.
The company launched the new direct lending fund about 12 months after its €4 billion predecessor, Permira Credit Solutions Fund IV, closed.
Permira’s fourth fund was backed by a range of institutional investors, including Alaska Permanent Fund Corp. and the Pennsylvania State Employees Retirement System, Debtwire reported. UK pension funds Tameside Metropolitan Borough and London Borough of Wandsworth Pension Fund have also committed to the vehicle.
Ares Management last year closed an 11 billion euro fund dedicated to supporting European mid-market companies, the largest of its kind. Ares said he expects the fund to have a total of €15 billion in investable capital, taking leverage into account.
HPS Investment Partners closed its largest direct lending fund last September, raising approximately $11.7 billion in commitments. The fund’s total firepower is $15.4 billion, including leverage. HarbourVest Partners also closed a new private debt fund in recent months.
Permira, with assets of €58 billion, is also in the market for its eighth flagship private equity fund, targeting €15 billion. The company recently closed its second Growth Opportunities fund at $4 billion, more than double the size of its predecessor.