Permira closes fifth buyout fund with revised target of 5.3 bln euro

LONDON, June 12 Thu Jun 12, 2014 1:11pm EDT

LONDON, June 12 (Reuters) - Permira, one of Europe's biggest private equity firms, has raised 5.3 billion euros for its fifth buyout fund compared to a previous 9.6 billion euros it raised for a fund in 2006.

Fundraising by private equity firms, which aim to buy into businesses with a view to selling them on at a profit after an overhaul, remains a challenge in a weak economic climate.

It took Permira almost three years to complete its fundraising for Permira V, which kicked off in September 2011 with a target of 6.5 billion euros ($8.85 billion).

Earlier this year the London-based private equity firm downsized its fund's target to around 4-5 billion euros while already committing capital to six new investments.

The private equity firm, which led the turnaround of fashion brand Valentino in 2007, acquired footwear brand Dr. Martens for 300 million pounds in October using capital from Permira V.

Its recent investments, also backed by Permira V, include the acquisition of UK wealth management specialist BestInvest, Canadian nutrition specialist Atrium Innovations and American online legal services provider LegalZoom.

Permira remains focused on five core sectors - consumer, financial services, healthcare, industrials and TMT - where its typical investment hovers around 250 million euros mark.

"Permira V has had a strong start and we are excited by the growth prospects of the six companies the fund has already acquired," said co-managing partner Kurt Björklund.

Permira's new fund was largely backed by its existing investors, which include pension funds and other institutions contributing 72% of total committed capital in Permira V. North American investors provided 40% of total commitments while approximately 30% came from Europe and 25% from Asia.

Permira's fund IV, which totalled 9.6 billion euros in 2006, before the financial meltdown, grew in value by 30% in 2013.

It has yet to realize more than ten investments including German fashion house Hugo Boss and UK life insurer Just Retirement which were acquired in 2007 and 2009, respectively. ($1 = 0.7345 Euros) (Reporting By Pamela Barbaglia; Editing by Elaine Hardcastle)

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