In a significant strategic shift, Patria Private Equity Group has announced the sale of 14 fund investments, marking a £180 million transaction as the group sharpens its focus on the European mid-market buyout sector.
This substantial portfolio disposal, representing 13% of the company’s holdings, not only underscores Patria’s selective investment approach but also delivers a strong 1.9x return on invested capital, along with a 16% internal rate of return (IRR) for the divested assets.
Transaction Details
The assets sold—known as the Divested Funds—consist mainly of older investments, many dating from 2011 to 2016, which have become less aligned with Patria Private Equity Group’s evolving strategy. As part of a competitive process led by a secondary market intermediary, Patria achieved a sale price close to 95% of the March 2024 valuation, a figure reflecting the market’s continued appetite for high-quality secondary assets.
The proceeds from this sale will be received in two parts: a first payment in December 2024 representing 45% of the total, with the remaining 55% due by September 2025. This structured timeline will further support Patria’s financial flexibility for future investments in its core market focus.
Strengthening the Core Portfolio
According to Patria Private Equity Group’s Chair, Alan Devine, the sale reinforces the quality of Patria’s overall portfolio and demonstrates the firm’s capability to generate value even from legacy assets. “This transaction highlights the attractiveness of our portfolio and provides us with capital for strategic growth initiatives. It’s a strong outcome in a competitive market, and we’re pleased to unlock funds for future ventures,” Devine remarked.
Alan Gauld, Lead Investment Manager at Patria, noted the importance of the group’s selective, value-driven approach to portfolio management. “The funds sold performed well, but with our intensified focus on mid-market buyouts, they no longer aligned with our strategy. The pricing and buyer interest we achieved underscore the disconnect between current valuations and the high quality of assets in our portfolio,” Gauld explained.
Strategic Use of Proceeds
The £180 million proceeds are set to bolster Patria Private Equity Group’s capacity for further investment. The sale will help reduce its current £142.3 million draw on a £300 million revolving credit facility, improving balance sheet strength. Including deferred proceeds, Patria will have around £333 million in available short-term resources, while supporting new investments and initiatives.
With the proceeds, Patria also aims to expand its allocation to direct investments, which currently represent 23% of its portfolio, solidifying its foothold in the European mid-market space.
Patria Private Equity Group’s ability to extract value from non-core assets illustrates the adaptability of private equity investment trusts in capitalising on strategic opportunities within the secondary market. The disposal marks another key step in Patria’s path towards a streamlined, targeted portfolio capable of delivering sustained returns in a competitive market.