November 30, 2018 / 12:39 PM / 5 months ago

REFILE-Permira's debt business nears record 3 bln euros for latest fund - sources

(Clarifies sources said in paragraph 2)

* PCS IV to raise close to 3 bln euros

* Would be Permira Debt Managers’ biggest fund yet

* Also one of biggest direct lending funds of 2018 - Preqin

By Simon Jessop and Dasha Afanasieva

LONDON, Nov 30 (Reuters) - Private markets asset manager Permira’s debt business is close to raising around 3 billion euros ($3.4 billion) for its latest credit fund, two sources told Reuters, in what would be its largest ever and one of the biggest in Europe this year.

Permira Debt Managers (PDM), jointly owned by Permira and PDM managers, is set to reach first close on its Permira Credit Solutions IV, or PCS IV, fund in the next couple of weeks, the sources said.

The fund will focus on direct lending to medium-sized businesses across Europe, many of which have found it tougher since the financial crisis to access bank funding.

Of the 20 Europe-focused direct-lending funds to close this year, just one was larger, Ares Management’s 6.5 billion euros Ares Capital Europe IV, which closed in July, data from industry tracker Preqin showed.

For investors, private credit has become an increasingly important source of returns in recent years as the yields on offer in more traditional sectors of the fixed income market were pushed lower by easy central bank monetary policies.

While the European Central Bank is set to follow the United States and Britain in tightening its policy by ending a massive bond-buying programme and raising interest rates in 2019, the region’s economic recovery remains patchy.

Corporate lending growth slowed in the euro zone in October, ECB data showed.

Private debt fund investments in European companies was at a post-crisis high of $126 billion in March 2018, Preqin data showed, while funds had $74 billion in so-called “dry powder”, money on hand and ready to invest.

In direct lending funds, specifically, as opposed to those focused on other areas of credit, such as distressed companies, assets under management was $97 billion, of which $58 billion was currently invested and $39 billion still waiting to be used. ($1 = 0.8810 euros) (Reporting by Simon Jessop; editing by David Evans)

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