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ANNUAL RE VIE W 2015
CONNEC T TO PERMIR A
CONNEC T TO GROW TH
A leading provider of carrier-neutral datacentre services in Sub-Saharan Africa
A fast-growing better-for-you snacks business
Global retailer delivering fast fashion for women, men and teens
One of the world’s largest agrochemical businesses
Leading receivables management businesses in Germany, the UK, Austria and Switzerland
A branded pan-European frozen food company
A leading European player in outdoor holidays One of the worlds leading aquatic health groups focused on the fast-growing aquaculture industry
A leading independent provider of data integration software
A global leader in embedded processing solutions for the automotive, consumer, industrial and networking markets
Enterprise e-commerce software and platform One of the world’s leading companies in the premium and luxury segment of the apparel market
€1.5bnInvested
€5.0bn1
Divested
2015 NEW INVESTMENTS 2015 DIVESTMENTS
BUYING WELL SELLING WELL
Find out more about our funds’ investmentson page 5
Find out more about our funds’ recent divestments on page 6
1 Proceeds received during 2015 including proceeds from the sale of Creganna
which completed in April 2016.
Permira was a pioneer in European private
equity. Since 1985, the Permira funds have
made over 200 investments.
We partner with world-class
management teams to unlock the
full potential of the companies in which
the Permira funds invest.
We are purely focused on companies with
signifi cant potential to grow and become
global industry leaders. We focus on
growth as the core driver of returns,
rather than fi nancial engineering.
MORE THAN 30 YEARS’ EXPERIENCE
PARTNERING WITH MANAGEMENT
TO DRIVE GROWTH
Permira at a glance
During our 30-year history, the Permira funds have partnered
with more than 200 ambitious businesses. We work closely with
exceptional management teams to help them solve complex
issues. By providing patient capital, board support and access
to our global networks, we help transform great businesses into
global leaders.
1 At entry in Permira V (“P5”).
30+Years
200+Investments
170+Divestments
12%P5 portfolio
EBITDA growth
8%P5 portfoliosales growth
3.8xAverage leverage1
22%Year-on-year
portfolio valuation growth
Mutually agreed business plan & fi nancial targets
Long term
Shared vision
Partnership
Average 5-year investment period
Strategic partner formanagement
Constructive boardmembers to support
key decisions
€31bnFunds raised
The Permira funds invest in large
companies across fi ve sectors.
Our teams look beyond the macro to
identify sub-sectors with signifi cant
underlying growth potential. Equity
invested since inception:
We have more than 200 people in 14
offi ces across Europe, the US and Asia.
Our teams help companies realise their
global growth ambitions, fi nd acquisition
targets, attract new management and
develop strategic relationships.
Throughout our history the Permira
funds have delivered strong returns
for our investors and the millions of
individuals that invest through them,
who are the ultimate benefi ciaries
of this outperformance.
IN FIVE SECTORS
ACROSS OUR GLOBAL PLATFORM
PRODUCING STRONG RETURNS FOR INVESTORS
1 As at 31 March 2016. Excludes Sisal, the divestment of which completed in May 2016. Includes Arcaplanet, which completed in May 2016 and John Masters Organics, which signed in May 2016.2 As at 31 March 2016. Excludes Saga (Acromas), the divestment of which completed in April 2016.3 As at 31 March 2016. Excludes Creganna, the divestment of which completed in April 2016.4 As at 31 March 2016. Excludes Ancestry, the partial divestment of which completed in May 2016.5 Permira funds returns shown as at 31 December 2015 and with respect to P4 include Continuing Limited Partners (“CLPs”) only. Top quartile and Public Market Equivalent (“PME”) analysis from
Thomson Eikon as at 24 May 2016. For industry benchmark net IRRs, “All funds since 1985” are benchmarked against Global buy-out funds (available data for 1985-95,1997, 2000, 2003, 2006 and 2014) and PE1-P5 funds are benchmarked against ”Medium”, “Large” and “Mega” buy-out funds (available data for 1997, 2000, 2003, 2006 and 2014) to 31 December 2015 (latest available).
14Offi ces
200+Employees
27Partners
PME (S&P 500)
PME (FTSE World Europe)
PERMIRA FUNDS’ NET IRR VS TOP
QUARTILE BENCHMARK & PMES5
Permira funds
Top quartile
P5 INVESTORS BY TYPE
Pension funds (56%)
Other fi nancial institutions (29%)
Investment managers (15%)
Consumer
€7.7bn1
Technology
€7.3bn4
Industrials
€4.0bn
Financial Services
€1.8bn2
Healthcare
€0.8bn3
PERMIRA ANNUAL REVIEW 2015
PERMIRA AT A GLANCE
5%7%
9%6%
16%
21%21%23%
All funds since 1985 PE1-P5
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PERMIRA ANNUAL REVIEW 2015
INTRODUCTION
A year of notable successes for Permira
Contents
SECTION 1COMPANY OVERVIEWPermira at a glance 1
SECTION 2ACTIVITY REVIEWInformatica case study 2Investing well 4New investments 5Selling well 6
SECTION 5ORGANISATION & TEAMGFKL Lowell case study 38Organisation & team 40
SECTION 6INVESTING RESPONSIBLYPharmaq case study 42Investing responsibly 44Netafi m case study 47
SECTION 4PRIVATE CREDITDavid Brown case study 32Permira Debt Managers 34
SECTION 3OUR INVESTMENT STRATEGYHugo Boss case study 8Investment strategy 10Sector focus Consumer 12Financial Services 16Healthcare 20Industrials 24Technology 28
Our long-term strategy of partnering with world-class management to accelerate growth has been working well. The Permira funds deployed £1.5bn in six investments across our fi ve sectors and a record €5bn1 was returned to our funds’ investors. The remaining portfolio continues to perform well, delivering EBITDA growth of 8% in 2015 and outperforming public market and private equity benchmarks. We believe that our sector-focused investment strategy, our long-term partnership approach and our large global team, will enable us to drive growth, and produce strong returns for our blue-chip investor base. Our private credit business, Permira Debt Managers, also had a strong year with Permira Credit Solutions II committing €553 million to 16 investments in 2015.
AT A GLANCE Cover image: ABS satellite launch, March 2015.
1 Proceeds received during 2015 including proceeds from the sale of Creganna which completed in April 2016.
2
Informatica is one of the world’s leading independent
providers of data integration software.
Informatica is ideally positioned to benefi t from technology trends in cloud, big data, master data management and data security. We are focused on building the company into a multi-billion dollar category leader in data management.
ANIL CHAKRAVARTHY CEO
WHY WE BACKED INFORMATICA
Informatica operates at the
nexus of major technology
trends including big data,
the on-premise-to-cloud
transition and data security
It operates in a multi-billion
dollar total addressable
market (TAM) that is driven
by compelling structural
growth trends (markets
growing c. +10% p.a.)
In that TAM, it is a leading
solutions provider within all
of its four segments of
activity; data integration,
master data management,
data quality and data security
Highly defensible business
model with over 50% of
recurring revenue and
fantastic customer loyalty
represented by top-decile
renewal rates and NPS
THE INVESTMENT STRATEGY
To bring to bear Permira’s
Technology Team Silicon
Valley network – including
the co-investors in this
investment: Microsoft
and Salesforce
To build on the company’s
leading position in its four
core billion-dollar+ markets
and invest heavily in its
leading big data and cloud
integration capabilities
To transition more revenue
streams to subscription
based models
To leverage best practices in
areas such as go-to-market
strategy, product innovation
and customer support,
built from successful
software investments
TECHNOLOGY
See more on our sectors p12
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ACTIVITY REVIEW
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2ACTIVITY REVIEW
In this sectionInformatica case study 2Investing well 4New investments 5Selling well 6
4
Investing well
Permira’s strategy is designed to pro-actively identify
investment opportunities in sectors that have the potential for
long-term growth irrespective of trends in the wider economy.
GROW TH SUB -SEC TOR
OPPORTUNIT Y FOR R APID EXPANSION
MULTIPLE VALUE CRE ATION
LEVERS
WORLD - CL ASS MANAGEMENT
PRIOR ACCESS TO THE
OPPORTUNIT Y
WHAT WE LOOK FOR:
The DNA of a Permira funds’ investment.
Our sector teams identify attractive sub-sectors that
benefi t from strong underlying growth trends and then
begin detailed analysis of the most attractive companies
operating in that space. At a micro level we then undertake
detailed due diligence on the company, its management
and its potential for signifi cant expansion.
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ACTIVITY REVIEW
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5
New investments
The Permira Funds enjoyed a strong year in 2015 in terms of
both new investments and portfolio company divestments.
Our current fund P5, made the following investments in the year.
COMPANY SECTOR
INVESTMENT
DATE
SIZE OF
TRANSACTION INVESTMENT CASE
A leading provider of carrier
neutral datacentre services
in Sub-Saharan Africa
Feb
2015€110m Growing its presence in the Sub-Saharan region by
supporting its existing customers in new geographies
Leading receivables
management businesses
in Germany, the UK,
Austria and Switzerland
Jun/Oct
2015€2.3bn The combination of Lowell and GFKL creates one of
the largest credit management businesses in Europe.
Investing in data analytics and foster operational
excellence to become a leader in a consolidating market
A fast growing better-for-you
snacks business
Jul
2015€165m Supporting international growth and transition to a
brand-led company
A leading European player
in outdoor holidays
Jul
2015€400m Building on a strong platform to consolidate fragmented
European market in outdoor holidays
A leading independent
provider of data
integration software
Aug
2015€4.7bn Driving operational improvement in exciting structural
growth market
Enterprise e-commerce
software and platform
Oct
2015€200m Developing ecosystem and improve cash conversion
€1.5bnInvested in 2015
6
Selling well
1 Proceeds received during 2015 and proceeds from the sale of Creganna which completed in April 2016.
2 The divestment of Saga was completed in April 2016. Returns include The AA proceeds.
3 1.6x MoM of which 1.1x MoM (€883m) in cash and 0.5x MoM (€420m) in anticipated deferred consideration.
4 The partial divestment of Ancestry completed in May 2016.
COMPANY SECTOR DATE FUND PERMIRA VALUE ADD EXIT TYPE
RETURN
MULTIPLE
Global retailer delivering
fast fashion for women,
men and teens
May
2015PE2
Transformed into a fl exible
multichannel retailer with a rapidly
growing e-commerce channel
Full Realisation/
Secondary Buy-Out4.4x
Leading frozen food company
with operations across Europe
Sep
2015PE3
Created the only pan-European
frozen food platform. Invested
in product innovation to build
a strong product pipeline
Full Realisation/
Trade Sale2.4x
One of the UK’s leading providers
of products and services to the
over-50s demographic, ranging
from travel, insurance and
fi nancial services
Apr
2016PE3
Expanded product offering
and signifi cant operational
improvement
Full Realisation/
Share Sale4.6x2
Leading global
agro-chemical business
Mar
2015P4
Expanded organically in high-
growth markets and extended
its product line through the
acquisition of Goëmar
Partial Realisation/
Trade Sale1.6x3
to date
Luxury fashion house of
womenswear, menswear,
accessories, beauty and shoes
Mar
2015P4
Transformed into a fast growing
branded retailer through the
international expansion of retail
network and growth of e-commerce
Full Realisation/
Share Sale2.2x
The world’s largest for-profi t
genealogy company
May
2016P4
Strengthened its core online
genealogy products while
dramatically developing the
emerging DNA business
Partial Realisation/
Sale to Financial Buyer2.6x4
to date
Retirement income solutions
provider
Mar/
Aug/
Oct
2015
P4Merged with Partnership, enabling
the group to offer even better
value to customers, investors and
business partners
Partial Realisation/
Merger/
Placing and Open Offer
Not
Disclosed
€5.0bn1
2015 Proceeds
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ACTIVITY REVIEW
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1 The divestment of Creganna completed in April 2016.
2 The divestment of Intelligrated was announced in July 2016.
COMPANY SECTOR DATE FUND PERMIRA VALUE ADD EXIT TYPE
RETURN
MULTIPLE
A global leader in health products
focused on the fast-growing
aquaculture industry
Nov
2015P4
Delivered international growth and
new product development plans
Full Realisation/
Trade Sale3.3x
A global leader in embedded
processing solutions for the
automotive, consumer, industrial
and networking markets
Jun/Jul
2016
Dec
2015
P4Merged with NXP creating a
semiconductor industry leader
in the automotive and Internet
of Things segments
Full Realisation/
Trade Sale1.1x
A leading provider of
advanced automated
material handling solutions2
July
2016P4
Expanded into emerging markets
and enhanced software capabilities
Full Realisation/
Trade Sale5.2x
A market leading sushi
restaurant chain in Japan
Dec
2015P4
Refi nanced to allow the company
to continue to make investments
in multiple growth initiatives
Partial Realisation/
Recapitalisation
Not
Disclosed
A leading manufacturer in
minimally invasive surgery
delivery devices
Apr
20161 P4Transformed from a medical
component manufacturer to
a global leader in end-to-end
manufacturing through the
acquisitions of Precision Wire
Components and ABT
Full Realisation/
Trade Sale3.3x
A leading online legal services
company in the USA
May
2015P5
Continued investment in new
products and operational
infrastructure
Partial Realisation/
Refi nancing
Not
Disclosed
8
CONSUMER
During the funds’ seven-year partnership with Hugo
Boss, we helped transform the company into a global
leader in the premium and luxury segment of the
apparel market with a presence of over 7,000 points
of sale across 129 countries. Our global network and
relationships across the retail ecosystem, as well as
our experience at developing global consumer brands,
made Permira the ideal partner.
TOGETHER WE ACHIEVED
The transformation of
Hugo Boss from a wholesale
supplier into a fast-growing
branded retailer, becoming
one of the ten most valuable
fashion brands worldwide
International expansion
in the Americas and Asia,
increasing share of revenues
by ten percent from 2007
to 2014
Clear brand differentiation
and the strengthening
of women’s wear and
accessories businesses
The launch of online stores
in all core countries since
2008 and the continuous
improvement in the offering
and customer experience
by way of a multi-channel
approach
Permira saw Hugo Boss’ huge potential from the very beginning and always acted as a reliable partner.
CLAUS-DIETRICH LAHRSCEO, 2008 – 2015
2007Acquisition
year
2.3xROI
44%Employee
growth
2015Exit year
0 200 400 600 800 1000 1200
Expansion of own retail network
Number of stores
2014/1040 stores
2007/333 stores
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INVESTMENT STRATEGY
In this sectionHugo Boss case study 8Investment strategy 10
Sector focusConsumer 12Financial Services 16Healthcare 20Industrials 24Technology 28
3INVESTMENT STRATEGY
10
Investment strategy
The Permira funds identify long-term trends we want to back
across fi ve key sectors. We then look beyond those trends to
identify market-leading businesses with strong growth potential.
We support these businesses over an average of fi ve years,
using our expertise and network to help them sustainably
improve operations and achieve their ambitions.
€1.5bnInvested in 6 new portfolio companies
8%P5 average sales growth
12%P5 EBITDA growth
Sales & Marketing
Mergers & acquisitions
Management Operations
INVESTING WELL
DRIVING PORTFOLIO GROWTH
Value Creation
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INVESTMENT STRATEGY
€5.0bnProceeds1
23%Net IRR since inception
Producing consistently strong
returns to our investors and the
millions of individuals that commit
to the underlying pension funds
and insurance schemes
PERMIRA FUNDS’ NET IRR VS TOP
QUARTILE BENCHMARK & PMES2
Permira funds
Top quartile
PME (S&P 500)
PME (FTSE World Europe)
SELLING WELL DELIVERING RESULTS
1 Proceeds received during 2015 including proceeds from the divestment of Creganna which completed in April 2016.2 Permira funds returns shown as at 31 December 2015 and with respect to P4 include Continuing Limited Partners (“CLPs”) only. Top quartile and Public Market Equivalent (“PME”) analysis from
Thomson Eikon as at 24 May 2016. For industry benchmark net IRRs, “All funds since 1985” are benchmarked against Global buy-out funds (available data for 1985-95,1997, 2000, 2003, 2006 and 2014) and PE1-P5 funds are benchmarked against ”Medium”, “Large” and “Mega” buy-out funds (available data for 1997, 2000, 2003, 2006 and 2014) to 31 December 2015 (latest available).
5%7%
9%6%
16%
21%21%23%
All funds since 1985 PE1-P5
12
Sector focus
CONSUMER
Consumer cohorts are changing at an ever-increasing pace. At a macro level this shift is driven by four global megatrends: urbanisation; the rising middle class; the aging population; and interconnectedness. But these global shifts in consumer circumstances are also happening in combination with profound changes in consumer preferences and behaviours. Proliferation of choice, for example, has resulted in the pre-eminence of two clear fi lters – price and content. In turn, that has yielded the rise of value formats and the imperative for premium product to offer clear differentiation. At the same time, technological change and social media are forcing consumer businesses to develop a far greater understanding of their customers and to prioritise real engagement. Meanwhile, at both ends of the age cohorts (millennials and the older generation) is the rise of the health and socially conscious consumers. Increasingly they are less focused on owning, and more focused on experiences.
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INVESTMENT STRATEGY
1 As at 31 March 2016. Figures exclude Sisal, the divestment of which completed in May 2016 and include Arcaplanet which completed in May 2016 and John Masters Organics which completed
in June 2016.
10Portfolio
companies1
€7.7bnEquity invested1
€4.9bnTotal sales1
14
Sector focus
We focus on the following areas: Throughout our history, the Permira funds have been a leading investor in consumer businesses. Our expertise in developing and growing global brands is supplemented by our technology and e-commerce franchises.
The fundamental shifts in consumer behaviour outlined on the previous page have helped to defi ne and inform the consumer team’s current sub-sector focus.
CONSUMER
APPAREL, ACCESSORIES, FOOTWEAR AND LIFESTYLE
HEALTH AND WELLNESS
VALUE AND/OR EXPERIENCE-BASED LEISURE
OMNI-CHANNEL SPECIALISED RETAILERS
CONSUMER TECHNOLOGY
CHERYL POTTERPARTNER HEAD OF CONSUMERLONDON
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INVESTMENT STRATEGY
BUYING WELLSelected current portfolio 20161
SELLING WELLSelected past investments
1 Excludes residual minority stakes.
2 Completed May 2016.
3 Completed June 2016.
COMPANY DESCRIPTION
Market-leading sushi restaurant chain
operator in Japan
A leading pet food retail chain
in Italy2
A globally recognised leader in the
manufacturing, development and
commercialisation of innovative,
science-based health products
A fast-growing better-for-you
snacks business
Iconic British footwear brand
An online travel agency in Spain,
Italy, Portugal, France, the UK,
Germany and the Nordics
A leading organic personal care
brand in Japan3
A leading European player in
outdoor holidays
COMPANY DESCRIPTION
Luxury motor-yachts manufacturer
A casino and hotel operator in
Macau SAR, China
One of the largest DIY retail
brands in the UK
A global leader in the premium
and luxury segment of the
apparel market
A branded pan-European
frozen food company
Global retailer delivering fast
fashion for men and teens
One of the largest fashion retailers
in Germany
One of the world’s most exclusive
fashion brands
16
Sector focus
FINANCIAL SERVICES
The fi nancial services industry is currently witnessing unprecedented regulatory and technological change. This dynamic is driving the largest institutions to re-focus on their core and look for ways to adapt to growing regulatory costs, as well as accelerating the consolidation of fragmented industries.
The effect of large institutions refocusing on their core is to create strong growth opportunities for challenger businesses to serve those newly under served market segments, especially for those with lower cost structures as a result of new technology (versus legacy systems at traditional players). Increasing regulation is pushing up the cost and increasing complexity of operating many fi nancial services businesses, which is proving challenging for sub-scale players. That and other regulatory pressures will drive consolidation of fragmented industries.
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INVESTMENT STRATEGY
1 As at 31 March 2016. The fi gures exclude Saga (Acromas), the divestment of which completed in April 2016.
3Portfolio
companies1
€1.8bnEquity invested1
€3.0bnTotal sales1
18
We focus on the following areas:
JAMES FRASER PARTNERCO-HEAD OF FINANCIAL SERVICES LONDON
PHILIP MUELDERPARTNERCO-HEAD OF FINANCIAL SERVICESHEAD OF LONDON
Our global team of investment professionals has extensive experience of backing leading brands in a variety of sub-sectors including asset management and specialty insurance. We continue to look for innovative businesses with outstanding customer propositions.
Sector focus
FINANCIAL SERVICES
ASSET AND WEALTH MANAGEMENT
SPECIALIST INSURANCE
SPECIALIST FINANCE
FINANCIAL INFRASTRUCTURE
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INVESTMENT STRATEGY
BUYING WELLSelected current portfolio 2016
SELLING WELLSelected past investments
COMPANY DESCRIPTION
A specialist UK fi nancial services
business that provides fi nancial
solutions to people either in or
approaching retirement
A leader in the UK wealth
management market
A leading receivables management
business in Germany, the UK,
Austria and Switzerland
COMPANY DESCRIPTION
One of the UK’s leading providers of
products and services to the over-50s
demographic, ranging from travel,
insurance and fi nancial services.
One of the UK’s largest roadside
recovery businesses and a leading
insurance broker
20
Sector focus
HEALTHCARE
The Healthcare sector is a large and highly attractive market with healthcare expenditure accounting for circa 14% of global GDP. The sector enjoys strong fundamentals with attractive pricing and robust growth driven by aging populations, the rise of obesity and health and wellness consumerism to name but a few trends. The opportunities are many but the challenges facing investors are also sizeable. Asset valuations are at their highest levels in over a decade and deep-pocketed strategic buyers are pursuing M&A fi ercely while global deal fl ow is low.
The Permira Healthcare sector team seeks to look beyond the obvious trends, focusing instead on differentiated and more complex themes and businesses which have the potential to become more valuable.
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INVESTMENT STRATEGY
1 As at 31 March 2016 excluding Creganna, the divestment of which completed in April 2016.
1Portfolio
company1
€800mEquity invested1
€180mCurrent sales1
22
Sector focus
We focus on the following areas:
MUBASHER SHEIKHPARTNERHEAD OF HEALTHCARELONDON
Our healthcare group was established in 2008. We have built a team with a combination of clinical, management and investment expertise, who supports innovative fast-growing healthcare businesses and helps them reach their full potential.
HEALTHCARE
ANIMAL HEALTH
SPECIALIST MEDICAL TECHNOLOGY
EFFICIENCY OF THE HEALTHCARE SYSTEM
SPECIFIC THERAPEUTIC AREAS OF PHARMA
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INVESTMENT STRATEGY
BUYING WELLSelected current portfolio 2016
SELLING WELLSelected past investments
COMPANY DESCRIPTION
Management of medical
equipment and assets in
hospitals and private clinics
COMPANY DESCRIPTION
Global manufacturer of delivery
devices for the minimally invasive
vascular surgery market
One of the world’s leading aquatic
health groups manufacturing
vaccines and therapeutic products
for the aquaculture industry
One of Germany’s leading
manufacturers of ophthalmic
lenses and frames
24
INDUSTRIALS
Sector focus
The need to fi nd solutions to the scarcity of natural resources and the imperative to increase effi ciency across supply chains are driving innovation in the industrials sector. At the same time, regulatory changes and consumer pressure are demanding ever higher environmental and ethical standards from industrial businesses. Within the industrials sector we look for businesses that can differentiate themselves through smart technology adoption, service orientation leveraging strong customer relationships and global expansion strategies.
We have a great deal of experience in the sector and have a track record of helping businesses benefi t from these trends, most recently with Intelligrated, a leading North American-based advanced fulfi lment solutions provider. In a little over four years the business increased revenue by more than 90% through new customer wins, tripling R&D investment and enhancing its software capabilities.
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INVESTMENT STRATEGY
1 As at 31 March 2016 excluding Intelligrated, the divestment of which was announced in July 2016.
3Portfolio
companies1
€4.0bnEquity invested1
€1.5bnTotal sales1
26
Sector focus
We focus on the following areas:
RICHARD CAREY PARTNERCO-HEAD OF INDUSTRIALS NEW YORK
TORSTEN VOGTPARTNER CO-HEAD OF INDUSTRIALS FRANKFURT
Permira’s global network of industry experts and investment specialists have advised many industrial and chemical companies in driving innovation and effi ciency to achieve growth. Today they are ready to accompany world-class industrial businesses who seek to gain advantage through the adoption of new technologies.
INDUSTRIALS
FOOD CHAIN
SERVICES
INDUSTRIAL BRANDS
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INVESTMENT STRATEGY
BUYING WELLSelected current portfolio 2016
SELLING WELLSelected past investments
COMPANY DESCRIPTION
An industry leader in providing
temporary liquid and solid
containment, pump, fi ltration
and trench shoring solutions
A supplier of fi ne and specialty
chemicals and customer
manufacturing solutions
A global leader in smart drip
and micro irrigation solutions
for sustainable agriculture and
other applications
COMPANY DESCRIPTION
A global leader in the personal
protection equipment industry
One of the world’s largest
agrochemical businesses
A global leader in ‘green chemistry’
A leading provider of
advanced automated
material handling solutions1
An aviation services company
Animal nutrition solutions business
1 The divestment of Intelligrated was announced in July 2016.
28
Sector focus
The Technology team benefi ts from addressing a large, global market opportunity that is continually evolving. After 30 years of investing experience, the team’s approach remains consistent – focusing on identifying sub-sector leaders which are advantageously competing on the right side of technology disruption curves.
A number of identifi ed long-term technology mega-trends will act as a guiding framework. These include ubiquitous connectivity, cloud delivery, software disruption, Big Data and primacy of unique content. While these trends are not themselves investable, they feed a deep set of underlying sub-sector themes which the team continues to mine.
TECHNOLOGY
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INVESTMENT STRATEGY
1 As at 31 March 2016. Excludes Ancestry, the partial divestment of which completed in May 2016.
8Portfolio
companies1
€7.4bnEquity invested1
€2.3bnTotal sales1
30
Sector focus
We focus on the following areas:
RICHARD SANDERSPARTNERCO-HEAD OF TECHNOLOGYLONDON
Capitalising on Permira’s long-standing expertise in the sector and our strong presence in the Silicon Valley, Permira’s global Technology team looks to uncover leading businesses with the ability to innovate in a constantly and rapidly changing environment.
BRIAN RUDERPARTNERCO-HEAD OF TECHNOLOGYHEAD OF MENLO PARK
TECHNOLOGY
NICHE INFRASTRUCTURE
ONLINE SUBSCRIPTION LEADERS
UNIQUE SYSTEMS SOFTWARE ASSETS
BIG DATA
CROSS-SECTOR SOFTWARE
EDUCATION TECHNOLOGY AND SERVICES
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INVESTMENT STRATEGY
BUYING WELLSelected current portfolio 2016
SELLING WELLSelected past investments
COMPANY DESCRIPTION
Fast-growing global satellite operator
Supplier of enterprise software
and solutions
Leading independent provider
of data integration software
A leading online legal services
company in the USA
An enterprise e-commerce
and software platform
A provider of online management
tools for SharePoint migration,
Exchange email archiving and
Offi ce 365 migration
A leading global provider of secure
remote support software
The largest carrier-neutral
datacentre operator in Africa
COMPANY DESCRIPTION
A leading genealogy company
providing online family history data
and personal DNA testing1
Provider of a wide range of
telecommunications products
and internet services in Germany
A global leader in embedded
processing solutions for the
automotive, consumer, industrial
and networking markets
Global mobile satellite
communications services provider
A leading provider of fi xed satellite
services worldwide
End-to-end software solutions for the
pay television industry
Pay-TV operators in Germany
and Austria
Technology-based school
improvement and student
assessment programmes
1 The Fund retains a minority holding in Ancestry.com.
32
INDUSTRIALS
David Brown designs, manufactures, distributes and
services highly engineered-to-order industrial gear and
drive systems, products and related equipment for use
in a wide range of industry sectors including land and
marine defence, mining, oil & gas, conventional power,
general industrial and rail. Worldwide, David Brown
has been a leading specialist in gear engineering and
innovation for more than 150 years.
Refreshingly they took a very different approach to
due diligence on our business... It felt much more
like a partnership approach and they did that work
themselves to get comfortable that this was a credit
opportunity that PCS2 wanted to invest in. And that
gave us a lot of comfort.
STEWART MACINTOSHINVESTMENT DIRECTOR, CLYDE BOWERS (SPONSOR)
7manufacturing facilities
5continents
18service centres
14sales offi ces
WHY WE BACKED DAVID BROWN
It has an outstanding brand
and engineering heritage in
the industrial gears market
It focuses on mission-critical
components where lead times
are crucial and component
failure results in economic
losses
There is a steady revenue
stream as a service and
repair business
It has long-term sole supplier
contracts in place with the
UK Ministry of Defence
It has a diversifi ed revenue
base across countries and
industries
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PRIVATE CREDIT
In this sectionDavid Brown case study 32Permira Debt Managers 34
4PRIVATECREDIT
34
Debt focus
PERMIRA DEBT MANAGERS
Permira Debt Managers is a leading provider of alternative credit solutions and long-term debt capital to successful European businesses. As well as fi nancial support, we share our deep sector insight and leading industry connections to foster growth for our clients across the continent.
Our funds seek to provide credit solutions to successful, medium-sized European businesses. Our funds invest capital on bespoke terms since we believe that no two companies look the same. We have supported companies across diverse industries from publishing, theme parks, cinemas and restaurants, to industrial gears, sofa retailers and aerospace suppliers.
Our structured credit business provides long-term capital to CLO managers in both the primary and secondary capital markets. This strategy relies on the excellent risk/reward characteristics inherent in senior secured debt, typically issued by larger leveraged buyouts. We specialise in the most junior parts of the capital structure especially equity, where our credit-led approach provides the greatest differentiation.
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PRIVATE CREDIT
1 All fi gures are since inception and accurate as at 30 June 2016.
90+Businesses1
€2.9bnCapital deployed1
12European countries1
36
Debt focus
We focus on the following areas:
THOMAS KYRIAKOUDISCHIEF INVESTMENT OFFICER
We pride ourselves on fi nding credit solutions in even the most complex and challenging circumstances. We understand what it takes to build a great business, and act as a true partner to families, owners and entrepreneurs undertaking this challenge. The Permira Debt Managers’ funds support growth across Europe and help businesses to realise their goals. In many cases, we are also able to provide advice and guidance borne from years of experience, as well as connections to some of Europe’s most infl uential business leaders. We always seek to leverage the wealth of knowledge that exists within the wider Permira group.
JAMES GREENWOODCHIEF EXECUTIVE OFFICER
PERMIRA DEBT MANAGERS
DIRECT LENDING
STRUCTURED CREDIT
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PRIVATE CREDIT
INVESTING WELLSelected current portfolio
COMPANY DESCRIPTION
A testing provider for environmental,
food, water and oil analysis
A leading video surveillance
integrator in France
One of the largest prestige and
luxury jewellery and watch retailer
in the UK
A leading laundry service provider
in the UK
A UK-based engineering company
principally engaged in the
manufacture of industrial
components including signifi cant
operations in industrial gear boxes
and hydraulic components
A leading global luggage brand,
with a reputation for innovation,
design and quality
A manufacturer of made-to-
measure window blinds, window
shutters, curtains, carpets, vinyl
fl ooring and awnings
COMPANY DESCRIPTION
A UK road haulage and warehousing
business currently comprising
5 regional operators
A leading B2C gaming operator
in Belgium with number 1 online
market position
One of the UK’s leading specialist
retailer of design-led stationery,
greetings cards and gifts
One of Europe’s earliest online
dating businesses and has built
up a strong position in Germany,
Switzerland and Austria
One of Europe’s leading
interdisciplinary engineering and
environmental consultancies
A leading international hospitality
company that operates exclusive,
private members clubs as well
as hotels, restaurants and spas
38
Leading receivables management businesses
in Germany, the UK, Austria and Switzerland.
WHY WE BACKED THEM
To create a top three
European player with
leading market positions
in the UK and Germany
by combining two highly
complementary businesses
with attractive synergies
To benefi t from strong
industry growth dynamics
and opportunities in both
debt purchasing and
third-party collection
To build on both businesses’
attractive growth and
fi nancial profi le which
shows strong double digit
revenue performance which
is expected to continue
outpacing the underlying
market growth through
further market share gains
THE INVESTMENT STRATEGY
To strengthen their positions
as market leaders by
investing in data analytics
and fostering operational
excellence
To consolidate a highly
fragmented market
To enhance the growth
profi le of both companies as
well as their cost effi ciency
through sharing of highly
complementary know-how
To enhance the services
the group can offer to
its corporate clients by
providing sophisticated
and integrated solutions
OUTCOME
The combination of Lowell and GFKL, market leaders in the
UK and Germany respectively, creates one of the largest credit
management businesses in Europe. With the backing of our funds,
the new Group is well positioned to capitalise on the strong growth
opportunities by taking advantage of the complementary skill sets
and their collective breadth and expertise. Together the company
creates a ‘one stop shop’ able to provide extensive recoverables
management services.
FINANCIAL SERVICES
We are very excited by the merger… this is a perfect strategic fi t driven by tremendous growth potential.
KAMYAR NIROUMAND CHAIRMAN OF THE SUPERVISORY BOARD OF GFKL
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ORGANISATION & TEAM
In this sectionGFKL Lowell case study 38Organisation & team 40
5ORGANISATION & TEAM
40
Organisation & team
OFFICE NETWORK
SOURCING IN LOCAL MARKETS
14 OFFICES
3 CONTINENTS
Permira has a deep and experienced organisation built over
three decades. Its roots across the key European markets
are long standing and its teams in the US and Asia are
well established. Permira combines this large platform with
genuine sector specialisation and dedicated functional
structure. This provides the fi rm with a powerful competitive
advantage, particularly where there is complexity or a
multi-geographic dimension to investment opportunities.
The effectiveness of this structure is underpinned by a
distinctive culture and a compensation model that reinforces
collaboration and team work.
SEC TOR TEAMS
INDUSTRY INSIGHTS AND RELATIONSHIPS
CONSUMER
FINANCIAL SERVICES
HEALTHCARE
INDUSTRIALS
TECHNOLOGY
INTERNAL GROUPS
OF EXPERTS
FINANCING GROUP
LEGAL & STRUCTURING GROUP
PORTFOLIO GROUP
HOW WE OPERATE
Permira operates a matrix structure where sector teams,
our local offi ce network and functional specialists collaborate
seamlessly across our global platform.
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ORGANISATION & TEAM
Senior team
1. KURT BJÖRKLUNDCO-MANAGING PARTNER
2. TOM LISTER
CO-MANAGING PARTNER
3. ROBIN BELL-JONESPARTNER
4. ROBERTO BIONDIPARTNER, HEAD OF FINANCING GROUP
5. ALISTAIR BOYLEHEAD OF GUERNSEY
6. RICHARD CAREYPARTNER, CO-HEAD OF INDUSTRIALS
7. FABRIZIO CARRETTIPARTNER, HEAD OF MILAN
8. JOHN COYLEPARTNER, HEAD OF NEW YORK
9. CHRIS DAVISONPARTNER, HEAD OF INVESTOR RELATIONS
10. ALEX EMERYPARTNER, HEAD OF ASIA
11. JAMES FRASERPARTNER, CO-HEAD OF FINANCIAL SERVICES
12. RYO FUJIIHEAD OF JAPAN
13. ULRICH GASSEPARTNER, HEAD OF LEGAL AND STRUCTURING GROUP
14. PETER GIBBSCHIEF OPERATING OFFICER,PERMIRA DEBT MANAGERS
15. JAMES GREENWOODCHIEF EXECUTIVE OFFICER,PERMIRA DEBT MANAGERS
16. THOMAS KYRIAKOUDISCHIEF INVESTMENT OFFICER, PERMIRA DEBT MANAGERS
17. SEAN LEECHIEF STRATEGYOFFICER ASIA, HEAD OF KOREA
18. CARLOS MALLOPARTNER, HEAD OF MADRID
19. SÉVERINE MICHELHEAD OF LUXEMBOURG
20. FRANCESCO DE MOJANAPARTNER
21. PHILIP MUELDERPARTNER, CO-HEAD OF FINANCIAL SERVICES, HEAD OF LONDON
22. OLA NORDQUISTPARTNER, HEAD OF NORDIC
23. SILVIA OTERIPARTNER
24. CHERYL POTTERPARTNER, HEAD OF CONSUMER
25. DIPAN PATELPARTNER
26. JÖRG ROCKENHÄUSERPARTNER, HEAD OF FRANKFURT
27. BRIAN RUDERPARTNER, CO-HEAD OF TECHNOLOGY,HEAD OF MENLO PARK
28. RICHARD SANDERSPARTNER, CO-HEAD OF TECHNOLOGY
29. FEDERICO SARUGGIAPARTNER
30. MUBASHER SHEIKHPARTNER, HEAD OF HEALTHCARE
31. JIM TSAOHEAD OF SHANGHAI
32. BENOIT VAUCHYPARTNER, HEAD OF PARIS
33. TORSTEN VOGTPARTNER, CO-HEAD OF INDUSTRIALS
34. NIC VOLPIPARTNER
35. MARTIN WECKWERTHPARTNER
1 2
12 13 14
18 19 20
21 22 23
24 25 26
27 28 29
30 31 32
33 34 35
9 10 11
6 7 8
3 4 5
15 1716
42
HEALTHCARE
More and more people around the world are eating fi sh
as a source of healthy protein. However, as we all know,
this demand is putting enormous pressure on marine
ecosystems and, as populations continue to rise, it is
increasingly unsustainable. One response has been the
dramatic rise in fi sh farming. We identifi ed this long-term
growth trend and looked for opportunities to partner with
companies that are providing solutions for this segment.
We found PHARMAQ and partnered with management
to create one of the world’s leading aquatic health group
manufacturing vaccines and therapeutic products for the
aquaculture industry.
WE PARTNERED WITH MANAGEMENT TO HELP THE COMPANY
Expand into emerging
markets and provided viable
alternatives to antibiotic
usage in food production
Extend the product offering
in the core salmon market to
provide protection against
devastating diseases that are
currently left unaddressed
Enable the company to
establish dialogue with
leading research institutions
and regulatory bodies in key
future growth markets to
ensure that PHARMAQ is
ready to capitalise on future
growth opportunities
Sell the business to a trade
buyer, enabling it to continue
this progress
The Permira funds’ signifi cant experience in investing in the food chain and their international reach made them an ideal partner to help us pursue our objective to expand our products and market share in exciting and growing markets.
MORTEN KR. NORDSTAD
CEO
2013Acquisition year
3.3xROI
2015Exit year
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INVESTING RESPONSIBLY
In this sectionPharmaq case study 42Investing responsibly 44Netafi m case study 47
6INVESTING RESPONSIBLY
44
THE PERMIRA APPROACH
Investing responsibly
Permira believes that a focus on sustainability is an important part of building lasting value in the funds’ portfolio companies. Environmental, social and governance (“ESG”) and sustainability considerations are embedded throughout the investment process and are expected to be a key part of the governance of the funds’ portfolio companies. Portfolio company executive management is responsible for operating all ESG matters at the company. Through active ownership, the Permira funds will continue to support portfolio companies in achieving their ambitions and improving their performance.
Understanding the key levers that drive business improvement, including ESG considerations, is at the heart of the Permira funds’ transformational investment approach. The funds’ ambition is to support portfolio companies to address material risks and deliver on value-creation opportunities relating to ESG and sustainability.
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INVESTING RESPONSIBLY
1 Employee and Enterprise Value data for the current Permira funds’ portfolio companies in aggregate as at Dec 2015.
>48,000Employees1
>€29bnEnterprise value1
46
ADINAH SHACKLETON HEAD OF ENVIRONMENT, SOCIAL AND GOVERNANCE
ESG and sustainability considerations are embedded throughout the investment process and are expected to be a key part of the governance of the funds’ portfolio companies. ESG is another lens applied when considering the risks and value creation opportunities for a potential investment.
Adinah Shackleton, Head of ESG, works with deal teams throughout the investment lifecycle to help maintain a focus on ESG matters.
Investing responsibly
ESG
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INVESTING RESPONSIBLY
Backing the world’s leader in drip irrigation:
Leading technology and market positions
Sales in 100+ countries, with expansion in China
Addressing global challenges around water scarcity,
food security, agricultural productivity
Partnership with Kibbutz investors
ESG highlights:
Netafi m drip irrigation products support farmers to achieve
c. 50% increase in crop yields and c. 40% decrease in water
consumption
Permira supported a transition to “Fit for Growth” Governance
standards and procedures (for example, updating Business
Conduct policies and reporting and implementing new
roles including Legal Counsel, Audit Committee and strong
independent board members)
A new “2020 Sustainability Strategy” has been implemented to
help customers achieve sustainable productivity while reducing
their environmental impact
By the end of 2015, more than US$25m in loans have been
extended to around 13,000 farmers covering over 15,000
hectares of land in India through Netafi m’s New Agricultural
Financing Agency, which endeavours to reach out to smallholder
farmers with easy and effi cient fi nancial solutions either directly
or through stakeholders in the value chain
In 2015 Netafi m, a UN Global Compact LEAD member,
committed to support the UN Sustainable Development Goals
with drip irrigation playing a key role in improved food security,
enhanced livelihoods, empowerment of women and conservation
of water
In 2013, Netafi m was winner of the Stockholm Industry Water
Award (SIWA), one of the world’s most important water industry
awards which recognises improved performance in production
processes, products and management, and innovative
approaches in water and wastewater technologies
INDUSTRIALS
c. 50%Increase in crop yields
c. 40%Decrease in water
consumption
48
Our offi ces
EUROPE
FRANKFURT
Permira Beteiligungsberatung GmbH,
Bockenheimer Landstrasse 33 60325
Frankfurt am Main
T: +49 69 97 14 66 0 F: +49 69 97 14 66 99
GUERNSEY
Permira (Guernsey) Limited, PO Box 503, Trafalgar Court,
Les Banques, St Peter Port, Guernsey, GY1 6DJ
T: +44 1481 743 200 F: +44 1481 743 201
LONDON
Permira Advisers LLP, 80 Pall Mall,
London, SW1Y 5ES, United Kingdom
T: +44 20 7632 1000 F: +44 20 7930 3185
LUXEMBOURG
Permira Luxembourg S.à.r.l,
488, route de Longwy, L-1940 Luxembourg
T: +352 26 86 811 F: +352 26 86 8181
MADRID
Permira Asesores S.L., Plaza Marqués de Salamanca 10,
Primero Izquierda.,28006, Madrid, Spain
T: +34 91 418 24 99 F: +34 91 426 11 93
MILAN
Permira Associati S.p.A, Palazzo Spinola,
Via San Paolo 10, 20121 Milan, Italy
T: +39 02 76 00 47 40 F: +39 02 76 00 47 06
PARIS
Permira Advisers SAS, 6 rue Halévy (2nd fl oor),
75009 Paris, France
T: +33 1 42 86 63 78
STOCKHOLM
Permira Advisers KB, Birger Jarlsgatan 12,
114 34 Stockholm, Sweden
T: +46 8 503 122 00 F: +46 8 503 122 99
USA
MENLO PARK
Permira Advisers LLC, 3000 Sand Hill Road,
Building 1 Suite 260, Menlo Park, CA 94025, United States
T: +1 650 681 4701 F: +1 650 853 0180
NEW YORK
Permira Advisers LLC, 320 Park Avenue, 28th Floor,
New York, NY 10022, United States
T: +1 212 386 7480 F: +1 212 386 7481
ASIA
HONG KONG
Permira Advisers Limited, Room 2804,
28/F One Exchange Square, 8 Connaught Place,
Central, Hong Kong
T: +852 3972 0800 F: +852 2111 1148
SEOUL
Permira Advisers Limited, Sewha Building 2Fl,
Dosandaero 67gil 29, Kangnamku, Seoul 135-954, Korea
T: +82 2 3448 4640 F: +82 2 3448 4641
SHANGHAI
Permira Advisers (China) Limited, Suite 3804, K. Wah Centre,
1010 Huai Hai Zhong Road, Shanghai, 200031, China
T: +8621 8032 1333 F: +8621 8032 1338
TOKYO
Permira Advisers KK, Akasaka Intercity Building 3F,
1-11-44 Akasaka, Minato-ku, Tokyo 107-0052, Japan
T: +81 (0)3 6230 2051 F: +81 (0)3 6230 2052
PERMIRA ANNUAL REVIEW 2015
INTRODUCTION
PLEASE NOTE THE FOLLOWING:
In this document, “Permira” means Permira
Holdings Limited and its subsidiaries
including the various entities which each
individually act as advisers or consultants
in relation to the Permira funds. The “Permira
funds” and the “funds” refer to one or more
of the following buy-out funds advised by
Permira: Permira V (P5), Permira IV (P4),
Permira Europe III (PE3), Permira Europe
II (PE2).
The valuation of remaining investments
of the Permira funds has been calculated in
accordance with the International Private
Equity and Venture Capital Guidelines.
“Partner” is a title applied internally within
Permira to certain senior professionals who
are treated within Permira as partners, but
not necessarily implying the carrying on of
a business as a partner or in partnership.
Portfolio company fi nancial information
has been converted based on the following
exchange rates (31 December 2015): €1 =
US$1.09, €1 = £0.74, €1 = ZAR16.79, €1 =
¥130.553, (31 March 2016) €1 = US$1.14,
€1 = £0.79, €1 = ZAR16.74, €1 = ¥127.97.
This document is made available for
information only by the manager of Permira
IV and the respective General Partners of
Permira Europe II, Permira Europe III and
Permira V (together, the “Fund Managers”).
This document should not be considered
as a recommendation by Permira in respect
of any investment fund managed or
advised by Permira and does not contain
all the information necessary to evaluate
any such fund. Information contained
in this document is believed by the Fund
Managers to be accurate as at the date of
this document however the Fund Managers
accept no responsibility for such information
and no reliance should be placed upon it.
Investors and prospective investors should
not treat this information as advice in
relation to legal, taxation or investment
matters. The Fund Managers do not assume
any obligation to, and do not intend to,
update any of the information contained
herein. No representations or warranties
whatsoever (whether expressed or implied),
including representations or warranties
relating to the completeness or accuracy of
the information contained herein, are given.
No person has been authorised to give any
information or make any representation not
contained herein and, if given or made, such
information or representation may not be
relied upon.
Certain information contained herein
regarding the Permira funds is aggregated
information relating to a number of
Permira funds or has been derived by
Permira. Such information is not refl ective
of the performance of individual funds or
portfolio companies of those funds and no
investor will benefi t from those aggregated
or derived returns. Past performance
information contained in this document is
not an indication of future performance.
All statements of opinion and/or belief
contained herein and all targets, forecasts
or statements relating to expectations
regarding future events or the possible
future performance of any Permira funds
or portfolio companies represent the
assessment of the Fund Managers on the
basis of information available to them as at
the date of this document. No representation
or warranty is made or assurance given that
any such statements, views, projections or
forecasts are correct or that the objectives
of such funds or businesses will be achieved.
This document does not constitute an offer
to sell, nor the solicitation or any offer to
subscribe for or acquire, any interests in any
Permira fund or in any portfolio company
of a Permira fund. The information contained
herein does not constitute investment
advice for the purposes of the EU Markets
in Financial Instruments Directive (2004/39/
EC) as implemented or advice for the
purpose of Article 53 of the UK Financial
Services and Markets 2000 (Regulated
Activities) Order 2001 (as amended) and
no person should construe or rely on the
information as such.
Designed and Produced by Friend
www.friendstudio.com
W W W.PERMIR A .COM
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