Permira has hired one of Europe's most senior corporate financiers to launch its new debt fund as it vies with CVC to become the continent's largest alternatives investment firm.

Peter Combe, a founder of the financial sponsors group at Lehman Brothers, will run the new business. Combe, who was chairman of financial sponsors and co-head of leveraged finance at Lehman, has a strong reputation and is regarded by rivals as a "terrific negotiator with good access to private equity firms". He resigned in the summer from Lehman, which counted Permira among its advisory clients, and was seen as instrumental in helping the buyout firm gain access to UK gaming company Gala last year, when Cinven and Candover syndicated equity before its merger with Coral Eurobet. Combe is the latest investment banker to join a private equity firm. Permira's arch-rival CVC hired former Deutsche Bank leveraged finance co-head David Wood to launch its debt business, Cordatus, in the summer. Meanwhile, veteran M&A banker John Studzinski resigned as head of corporate and investment banking at HSBC to join Blackstone, the world's largest private equity fund, in September. Financial News' sister publication, Private Equity News, revealed last week that US-based Parish Capital, which invests in small private equity funds, has recruited a buyout team from Bank of America to launch its European arm. Permira's recruitment of Combe is the latest stage in the battle between CVC Capital Partners and Permira to become Europe's largest alternative investment firm. The two have been pursuing common strategies and CVC, run by Michael Smith, is set to overtake its rival as Europe's largest private equity firm by closing a €4bn ($5bn) "side-car" fund by the end of the month. This fund will take the firm's available firepower to $14.75bn (€11.2bn), compared with Permira's $14.2bn. Permira overtook CVC as the firm with the largest fund in Europe in July. But those close to CVC said the fact that it could raise €4bn "in a heartbeat" from investors was an achievement. Sources close to both firms played down the rivalry, with Permira by pointing out the two had worked together in buying UK breakdown recovery group the Automobile Association. Side-car funds are a recent innovation and are designed to provide extra funds for large investments. A side-car fund mirrors an existing fund, but bypasses a lengthy round of fundraising by replicating the agreed procedures, terms and conditions of the principal vehicle. Blackstone used a similar device in October to raise $5bn to add to its $15.6bn fifth global buyout fund, which closed in July.