The firm’s LPs granted the media-focused PE firm a six-month extension, until June 30, to close its seventh fund, several placement and LP sources say. Fund VII, which is looking to collect $5 billion, had been expected to close in December or sometime in that first quarter. But Providence’s LPs wanted more time to finish some paperwork, one source says.
Currently, Providence’s Fund VII is coming in “just shy” of $5 billion, three sources say. The PE firm is expected to “fight like hell” to get to the $5 billion target, a placement agent says.
News of the delay comes as AutoTrader, which is backed by Cox Enterprises, Providence and Kleiner Perkins, pulled its $300 million IPO, citing market condition.
At $5 billion Providence’s Fund VII would mark a reduction in expectations for the firm. In early 2011, Providence initially hoped to raise $8 billion for its seventh fund, according to press reports. In December 2011, peHUB reported that Providence was having a hard time reaching its target, which was then $6 billion. peHUB last October reported that the target for Fund VII was reduced to $5 billion.
The $5 billion pool would be less than half the size of the firm’s last fund. Providence raised $12.1 billion for Fund VI in 2007, which was nearly triple the size of its fifth fund, a $4.25 billion pool raised in 2004.
Fund VI is generating a 4.8% net IRR, while Providence’s fifth pool is producing a net IRR of 2.9%, according to June 30 data from backer CalPERS.
Officials for Providence declined comment.
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