1: You just held a colossal first close on your latest fund. What are the benefits of having one of the largest funds on the block?
It gives us enough capital to look at more opportunities. Also, with all these new mega funds, I believe we’re going to see the size of consortiums get smaller. It will shrink to two or three investors as opposed to these huge consortiums of five or six. Having a larger base of capital will help in those kinds of transactions.
2: U.S. firms have been active in Europe for years. Perhaps returning the favor, it seems like Permira has placed more emphasis on building its U.S. presence. Why does the firm think it’s important to be active here?
We came into the U.S. in October 2002, and made a big commitment in terms of people and resources. It’s the largest market in the world. Not necessarily bigger than all of Europe, but it’s still the biggest single market.
It’s important to us because there are opportunities we go after that are either sourced here or at the very least have a touch point here. Our investment in Intelsat might serve as an example. It’s a company that sells services on a global basis yet is headquartered here and in Bermuda.
3: What is your U.S. strategy? Do targets have to fit into a global scheme to attract Permira?
There has to be some international flavor. Even if it’s just a small international component and there’s the opportunity to grow it — that would interest us. But we’re not looking to take a business and build its international presence from scratch or invest in something, such as a supermarket, that only operates in its own small U.S. market.
4: When operating in the U.S., how do you differentiate yourself from your domestic rivals?
I think it really goes back to our local infrastructure throughout Europe. Look at our investment in Aearo [Technologies]. The management there believed that we could really help them build out their markets. We made that investment three months ago, and we’ve already made a difference [in building its global presence].
5: Is there ever any reticence on the part of domestic sellers to sell to an overseas company?
I wouldn’t call it reticence, but there is an education process that I have to go through to describe to CEOs and company owners who we are. Once they understand that, in a lot of cases they prefer what we can bring.