French buyouts house PAI Partner could halve its €5.4bn fund in the wake of the resignations of CEO Dominique Mégret and Bertrand Meunier.
According to sources close the situation, the fund cut has been outlined in a letter to investors following the key-man clause triggered by Mégret’s departure. This would allow LPs to renegotiate their commitments to the fund – PAI Europe V – which closed in May 2008, receiving commitments from 130 investors, over 70% of whom re-upped from fund IV.
The firm is prohibited from making any new investors whilst LP commitments are being renegotiated. The fund is about one fifth invested, its last two deals coming in the summer of last year when it took an 18% stake in Atos Origin, a French IT company, and co-invested with Goldman Sachs Capital Partners to buy German building materials business Xella.
Mégret and Meunier left PAI following a boardroom bust-up. Mégret was with PAI for 35 years and has been replaced as CEO by Lionel Zinsou, who has been with the firm since July 2008. Mégret is staying on as chairman but has plans to retire in early 2010.