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PAI mulls GP-led restructuring on crisis-era fund – exclusive

The buyout firm is exploring options for its 2008-vintage Fund V, which holds the world's third-largest ice cream producer Froneri, in a deal that could be worth close to €2bn.

PAI Partners, one of Europe’s largest private equity firms, is considering its second GP-led secondaries process in the space of a year.

The Paris-headquartered manager is exploring restructuring options on PAI Europe V, its 2008-vintage buyout fund, according to three sources familiar with the matter. The deal could be worth as much as €1.8 billion, according to one of the sources.

The firm is understood to be in discussions with Evercore over the potential deal.

Fund V has two remaining assets, with Froneri, the world’s third-largest ice cream manufacturer, accounting for a large majority of remaining net asset value, Secondaries Investor understands.

Froneri was formed in 2016 as a joint venture between PAI portfolio company R&R Ice Cream and Swiss conglomerate Nestlé, combining the two parties’ businesses in Europe, Egypt, Argentina, Australia, Brazil, the Philippines and South Africa, according to Froneri’s 2017 annual report.

PAI Europe V raised €2.67 billion by final close in 2008 against a target of €2.5 billion, according to PEI data. Investors include Canada Pension Plan Investment Board, Florida State Board of Administration and Ilmarinen Mutual Pension Insurance Company.

The fund delivered a net internal rate of return of 13 percent and a net multiple of 2.1x as of 31 December, according to an investor source.

In July, Secondaries Investor reported that PAI was exploring a single-asset restructuring on its 2004-vintage Fund IV. Landmark Partners was lead investor on the deal, which involved Swedish chemicals maker Perstorp being moved into a new vehicle managed by PAI and backed by secondaries capital.

Evercore and PAI declined to comment.