Palamon Capital Partners has reached a final closing of its second fund, Palamon European Equity II with commitments totalling €670m. Palamon II is over 50% larger than Palamon’s €440m maiden 1999 fund, Palamon European Equity (Palamon I). With Palamon II, the firm will be able to extend its activities in the European development capital market.
Palamon I has made 15 investments in seven countries and has returned over 90% of the capital invested through six exits while continuing to hold nine companies with substantial unrealised value.
Palamon II has already committed €84m to three portfolio companies comprising Loyalty Partner GmbH, a German loyalty programme operator; Espresso House AB, a Swedish chain of branded coffee bars and cadooz AG, a rapidly growing German marketing services company.
A total of 30 investor groups, including both new and returning limited partners, have invested in Palamon II. Among the returning partners are the Washington State Investment Board, Oregon Public Employees Retirement Fund, Morgan Stanley Alternative Investment Partners, Adams Street Partners, Pennsylvania SERS, Swiss Re and City and County of San Francisco Employees’ Retirement System. Among the new investors are AlpInvest, Chubb Insurance, the Irish National Pension Reserve Fund, the Church Pension Fund, NORD Holding, Scottish Widows Investment Programme and Macquarie Global Private Equity Fund.
Palamon II, which will take control positions through multiple tranches of investment, will continue the firm’s policy of investing €10m to €80m throughout Europe in middle-market businesses in services sectors displaying significant growth potential.
Advisers on the fund raising were S J Berwin (overall), Ropes and Gray (US) and P&P Poellath & Partners (Germany). Credit Suisse acted as placement agent.