European private equity fund PAI is asking investors to increase the amount it is allowed to raise for its 3 billion euros ($3.5 billion) Fund VI after receiving strong demand, a source familiar with the matter said on Tuesday.
The French-based owner of R&R Ice Cream is asking investors to raise the planned amount of the fund, or hard cap, to 3.2 billion euros. The firm plans to make an announcement in the first quarter of the year, less than two years since it launched its fundraising, the source said.
Fund VI had its first close of 1.4 billion euros in January 2014, and has made six investments.
It is PAI’s first fundraising since a 2009 boardroom struggle pushed out top management in favour of Lionel Zinsou, the former Rothschild banker who now heads the buyout firm.
Previous investors in the firm’s Fund V have increased their commitments in Fund VI by an average of almost 30 percent, the source added.
The buyout house’s Fund V has so far made an average of 2.5 times its investments from the exits of Nuance and Atos. The firm also sold United Biscuits to Yildiz Holding, Turkey’s largest food group, in November last year for a money multiple of 3.7 times.
Private equity firms generally target a return of 2-3 times their money.
Buyout funds raised a total of $176.2 billion in 2014, according to data firm Preqin. Private equity activity has rebounded since the financial crisis, with $332 billion in buyout deals announced last year, the highest since 2007. ($1 = 0.8636 Euros)
(Reporting By Freya Berry, editing by David Evans)
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