PROVIDENCE – Providence Equity Partners LLC is offering a fee break to large investors as it enters the second leg of fund raising for a $6 billion seventh fund, according to a recent report by Dow Jones Newswire.
The firm will charge a lower management fee for investors that commit $500 million or more to Providence Equity Partners VII LP, which recently held a first close on $1.9 billion at the end of June, said the report, which was based on information from people familiar with the situation.
The fund has secured $3 billion in commitments, the report said.
The Providence-based equity is expected to hold a second close on Fund VII in a week or so, said people familiar with the situation. The attempt to attract larger commitments with fee breaks is a first for the firm, Dow Jones Newswire said.
This year, the Washington State Investment Board committed up to $300 million to Providence Equity’s latest fund, but whether the fee break will encourage the pension plan to bolster its commitment is yet to be seen.
Large investors in Providence Equity’s predecessor fund such as New York State Common Retirement Fund, California State Teachers’ Retirement System and Canada Pension Plan Investment Board could be likely targets of the fee break.
In early January, Providence Equity came to market with its seventh fund initially telling some investors that it aimed to raise $8 billion although it never set an exact target on its private placement memorandum. The firm later changed the target to $6 billion, close to half the size of the $12.1 billion the previous Providence Equity Partners fund raised in 2007.
The firm invests in businesses in the media, entertainment, communications and information industries. Providence Equity participates in large buyouts and take-private deals, growth capital investments and recapitalizations of family-owned businesses.
