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Cinven has agreed to buy a majority stake in the fund administrator Alter Domus from Permira, in a €4.9bn deal that is one of the biggest between private equity groups over the past year.
Luxembourg-based Alter Domus, which was founded in 2003 and has about 5,000 employees, provides a range of services to fund management groups including handling administrative and compliance issues.
The sale values Alter Domus at €4.9bn, including debt, and will see Permira and the group’s founders keep stakes, according to statements from the sides announcing the transaction. Existing investors in Alter Domus will sell approximately half of their shares to Cinven.
London-based Cinven has previously targeted businesses that provide services to the fund management industry.
In 2021, it held talks over a potential £1.4bn takeover with the then UK-listed fund administration business Sanne. The business was ultimately acquired by Apex Group, another fund administrator.
“Fund services has been a priority subsector for Cinven’s business services team for some time due to the attractive business model characteristics and strong growth drivers,” said Rory Neeson, a partner at Cinven.
Cinven added in a statement that it saw further opportunities to grow Alter Domus through acquisitions across markets and geographies.
The company has expanded to cover 23 jurisdictions after originating as a spin-off from PwC, the Big Four accounting and professional services firm.
Alter Domus has increased its revenues and workforce fivefold since Permira first took a stake in the company in 2017.
With Permira’s backing, Alter Domus has entered the US market through acquisitions, which is now the biggest part of its business.
The deal has been a successful one for Permira, generating a more than seven-times return on its investment.
“We are delighted to have agreed a transaction that both enables us to return significant capital to our investors and to remain invested in an outstanding business going forward,” said Permira partner Philip Muelder.
The transaction comes amid a broader slump in dealmaking between buyout groups.
Private equity companies are under pressure to pick up the pace of dealmaking in order to exit investments and return funds to their own backers, but have faced challenges amid shifting markets.
Permira is also planning a public listing for its Italian luxury sports shoe brand Golden Goose, which could come as soon as the first half of this year.
The deal with Alter Domus is subject to customary regulatory approvals and other closing conditions. Alter Domus was advised by Goldman Sachs and Raymond James.
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