Amid swirling rumors in the Israeli capital market that European private equity fund Permira Advisors LLC is in talks to acquire two Israeli companies - Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) - and Netafim Ltd., Permira partner James Fraser arrived for a visit in Israel this week.
At a press briefing, Fraser declined to comment on the status of the negotiations for Clal Insurance and Netafim. In early 2009, Permira acquired NDS Ltd., which has a facility in Jerusalem, the fund's only acquisition of an Israeli affiliated company.
Fraser said, "We are a private equity fund that invests for the long haul. Generally, we invest for up to five years, and we seek to buy a majority stake in the companies we invest in." He presented figures that showed that 38% of Permira's investment is in consumer products companies (such as designer Hugo Boss AG (XETRA: BOS), 32% of investment is technology and media companies (such as NDS), 21% is in industry, especially chemicals companies, and 9% is in financial companies.
"Our average holding period in a company is 5-7 years," said Fraser. Asked if Permira tended to change a company's management, he replied, "We sit on the companies' boards of directors. We sometimes change management and we sometimes don’t. We invest in organic growth and through acquisitions, including capital injections, if necessary, and in streamlining the businesses we enter."
Permira was founded in 1985, and has raised €20.1 billion to date in several funds. The most recent fund, Permira IV, raised €9.6 billion in 2006. Its investment period is due to end in 2012, and the fund, unless extended, is for 12 years, to 2018, unless it is extended. Permira's earlier funds have made a return on investment of €16 billion to date.
Permira, originally called Schroder Ventures Europe, began investing outside Europe in the early 2000s, when it invested in the US. The Permira IV Fund began investing elsewhere in the world, especially in East Asia. Permira executives say that Permira has had an annual return of 24% during its 25 years of operations. It has made more than 190 investments.
Permira's interest in Israeli companies is not necessarily a mark of distinction for the Israeli economy. "We don’t necessary assess economies; we're interested in the companies we invest in, which we examine thoroughly," said Fraser, adding that Permira does not rush to invest. He said that sometimes Permira examines a particular investment for a year or more.
Published by Globes [online], Israel business news - www.globes-online.com - on February 23, 2011
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