PSG Equity has raised more than €4.4bn for its third European growth equity fund, PSG Europe III, and the fund reached its hard cap, according to Private Equity Wire. PSG Europe III received commitments from a mix of new and existing investors, including state pension funds, sovereign wealth funds, insurers, family offices and high-net-worth individuals, according to Private Equity Wire.
Fund size versus predecessor vehicle
PSG Europe III is more than 70% larger than PSG Europe II, which closed on €2.6bn in October 2023, according to Private Equity Wire. Private Equity Wire reported that PSG Europe III “significantly” increased the size of its predecessor vehicle as investors continued to commit capital to software and technology-focused private markets strategies.
Strategy focus: European software and technology-enabled businesses
PSG Europe III will focus on software and technology-enabled businesses across Europe, with PSG seeking to help companies scale into pan-European category leaders with international operations, according to Private Equity Wire. The strategy includes investments in established software platforms that can use artificial intelligence to expand their products and accelerate growth, alongside companies developing AI-native technologies, according to Private Equity Wire.
PSG said it sees opportunities emerging from increased AI adoption, demand for European technology providers and growing emphasis on digital sovereignty, according to Private Equity Wire. PSG is targeting businesses with specialist industry expertise, proprietary data and technology infrastructure that can benefit from the expansion of AI, according to Private Equity Wire.
Recent investments, European footprint, and track record
PSG’s recent European investments include Mistral AI, BrightAnalytics, Aikido Security, Quality Hosting, Emotion Mobility, Namirial and Glasswall, according to Private Equity Wire. PSG established its European operation in 2019 and now has 83 professionals across its London headquarters and Paris office, including investment professionals and software and technology specialists working with portfolio companies, according to Private Equity Wire.
PSG has made 43 platform investments in Europe to date, alongside 98 add-on acquisitions and 12 realisation events, according to Private Equity Wire. Its European portfolio companies have operations across 24 cities, according to Private Equity Wire. Private Equity Wire reported that recent exits include Sellsy, Signaturit, N2F, Artur’in, Hornetsecurity and Mapal.
Manager commentary
Peter Wilde, chairman of PSG, said the fund’s close demonstrated support from both existing and new investors and reflected the firm’s approach to backing high-growth software companies with capital and operational resources, according to Private Equity Wire. Mark Hastings, CEO of PSG, said AI was expanding the enterprise software opportunity by creating new categories while also providing established platforms with opportunities to improve their products and accelerate innovation, according to Private Equity Wire.
In widely known context, hard caps are commonly used in private funds to set a maximum fund size, after which a manager stops accepting commitments. In widely known context, growth equity funds typically target established companies seeking capital to scale, which can include software and technology-enabled businesses.
