NEW YORK (Reuters) – Some buy-out groups are coming under pressure from cash-strapped investors to reduce their commitments after Permira’s PERM.UL unprecedented offer to let its backers off the hook for 1.5 billion euros ($1.91 billion), the Financial Times said.
The buy-out groups include Terra Firma, which is struggling to turn round the EMI music group, and Apollo Global Management, it said.
Today many investors in private equity funds are considering something akin to a buyer’s strike. While most pension funds say they have no trouble meeting calls for money, endowments and foundations have been hit by losses and some may no longer be able to afford to write cheques they promised, the paper said.
European buyout firm Permira said on Friday it has proposed a 60 percent cap on commitments to its 11.1 billion euro ($14.1 billion) fund for investors struggling to meet their planned allocations.
Permira said the proposals will allow current investors to cap their commitments to the fund at 60 percent of their previously agreed figure. (Reporting by Megan Davies; Editing by Kazunori Takada)