Permira Debt Managers (PDM), the debt management and advisory arm of Permira, has reached a final close on its third direct lending fund, Permira Credit Solutions III, with commitments of circa EUR1.7 billion. Including leverage the Fund will have investable capital of circa EUR2.1 billion.
PCS3 is taking advantage of the rapidly growing and highly attractive opportunity for direct lending in Europe. A structural shift in European credit markets, catalysed by the financial crisis of 2008, continues to drive a retrenchment of traditional sources of debt capital. This has created a significant funding gap that has driven strong demand for alternative sources of finance.
Since its first close in December 2016, PCS3 has continued the successful strategy of predecessor fund, Permira Credit Solutions II (“PCS2”); a highly selective strategy focused predominantly on primary, senior secured investments in mid-market European companies. Typically PCS3 acts as sole or lead lender, and invests in both sponsor-owned and non-sponsored businesses. To date the fund has deployed a total of EUR660m in nine companies including Benelux medical equipment distributor Duomed, UK private members club Soho House and German auto parts manufacturer Reutter Group.
PCS3 received backing from a diverse investor base including pension funds, insurance companies and family offices across Europe, North America, Asia, Australia and the Middle East. Over half of the investors in PCS3 are new relationships.
PDM’s previous direct lending fund, PCS2, closed at circa EUR800m in 2015 and is currently over 95 per cent invested. Since inception, the fund has invested in 30 companies – of which 7 have been fully realised.
PDM continues to expand its team with the recruitment of six new professionals in 2017 which brings the team to over 30 professionals today.
James Greenwood, CEO of PDM, says: “This is a great outcome which reflects the success of our previous funds and our market-leading position in European mid-market direct lending today. We continue to see a strong opportunity in Europe where traditional sources of debt capital have tightened and we have made significant investments in our team to ensure we find attractive businesses to back. We are delighted with the support we have received from existing and new investors alike which evidences their continued confidence in our strategy.”
Thomas Kyriakoudis, Chief Investment Officer of PDM, adds: “We continue to see plenty of opportunities to help expand medium-sized European businesses with valuable assets and good growth prospects. Our strong deployment rate in the past 12 months, with over EUR1bn invested in 16 companies, demonstrates the attractiveness of a flexible credit solution to companies today as well as the effectiveness of the origination platform we have built over the past 10 years. PCS3 is over 30 per cent deployed today and the pipeline remains strong.”
