Private equity fundraising has slowed down in 2018, after a strong 8-year run. The amount of capital raised annually for new funds by U.S. private equity firms increased more than threefold from 2010 (when nearly $71 billion was raised) to 2017 (when $243 billion was raised). But U.S. PE firms closed only $69 billion worth of new funds during the first half of 2018, a far cry from 2017 and on pace for a six-year low, according to Pitchbook. Here’s a look at 10 PE firms that have succeeded in raising new funds recently despite the slowdown, including the Carlyle Group (Nasdaq: CG), PPC Partners, Soundcore Capital Partners and Sycamore Partners. The fundraising data is culled by Mergers & Acquisitions from a variety of sources, including SEC filings, Thomson Reuters and company press releases. For fundraising news on an on-going basis, see our weekly column, PE fundraising scorecard: Audax and Advent.
Middle-market private equity firm Brightstar Capital Partners, founded by Andrew Weinberg, closed its inaugural fund at $710 million. New York-based Brightstar, which invests up to $250 million in businesses, has already invested in three portfolio companies: logistics technology provider Global Resale, QualTek USA LLC, a provider of engineering, installation, fulfillment and program management,
and water supplier Texas Water Supply Co.
David Rubenstein, billionaire and co-chief executive officer of the Carlyle Group LP, gestures as he speaks during a panel session on the opening day of the World Economic Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 23, 2018. World leaders, influential executives, bankers and policy makers attend the 48th annual meeting of the World Economic Forum in Davos from Jan. 23 - 26. Photographer: Jason Alden/Bloomberg
The Carlyle Group LP (Nasdaq: CG) closed its biggest fund yet, and raised $18.5 billion as money pours into the private equity industry from investors seeking the high returns it has historically delivered. The fund will invest primarily in the U.S. across five industries, including aerospace, defense and government services, the Washington-based firm said in a statement. Carlyle was co-founded by David Rubenstein in 1987. Carlyle has about $201 billion in assets under management across 324 million investment vehicles.
Middle-market private equity firm Clearlake Capital Group, co-founded by José Feliciano and Behdad Eghbali, has closed its fifth fund at more than $3.6 billion in investor commitments. The investment vehicle, dubbed Clearlake Capital Partners Fund V, is the largest to date for the Santa Monica, California-based firm, which has now raised more than $7 billion from investors since the firm started in 2006. Clearlake touts a proprietary approach to improving operations at the companies it invests in, and even has a registered trademark on its name for the approach: O.P.S. The firm describes the O.P.S. method as one that “generates creative solutions to operational challenges and offers resources and expertise that small- and medium-sized companies typically do not possess.”
Mark Einhaus/Mark Einhaus
Huron Capital has raised its first non-control private equity fund, called the Huron Flex Equity Fund LP, at $142 million. Through non-control investments, Huron Flex Equity aims to provide customized options designed to help business owners accomplish a variety of growth and liquidity objectives. "Our goal is to leverage our buy-and-build strategy in partnership with seasoned executives to improve and grow our businesses through strategic initiatives, operational improvements and add-on acquisitions throughout the lower middle market," says managing partner Brian Demkowicz.
LLR Partners has closed LLR Equity Partners V LP at $1.2 billion. The Philadelphia firm, which backs companies in five industries – education, fintech, healthcare, security and software – has already closed investments from the fund in eight companies: 3SI Security Systems, eLocal, Eye Health America,MedBridge, Midigator, Onapsis, PhishLabs and Professional Capital Services. “Our collaborative and flexible investment approach has remained consistent since LLR’s founding in 1999,” said partner Mitchell Hollin.
A man checks his smartphone whilst standing against an illuminated screen bearing the Uber Technologies Inc. logo in this arranged photograph in London, U.K., on Tuesday, June 26, 2018. Uber won an 15-month probationary license to operate in London after convincing a judge and regulators that the ride-sharing service had shaken off its gung-ho attitude of the past. Photographer: Chris Ratcliffe/Bloomberg
Norwest Venture Partners
Norwest Venture Partners has closed its fourteenth investment fund with approximately $1.5 billion in capital commitments. The fund, called Norwest Venture Partners XIV, is the firm’s largest to date. Fund XIV will target “disruptive and market-leading” businesses involved in the consumer, enterprise and healthcare industries. The firm’s portfolio consists of investments in companies such as Uber, Udemy, Spotify, Lending Club and Pepperfry.
Patrick T. Fallon/Bloomberg
PPC Partners, led by Tony Pritzker, has raised its second fund at $1.8 billion. PPC Partners was launched in 2018 by Pritzker Group Private Capital as its exclusive acquirer of middle-market companies. Tony Pritzker is one of the heirs to the Hyatt Hotels Corp. (NYSE: H) fortune. “Our differentiated, long-duration capital base provides us with the flexibility to grow our companies and do what’s right for our businesses over the long term” says PPC Partners managing partner Paul Carbone. PPC Partners invests in middle-market businesses that are valued up to $750 million.
Soundcore Capital Partners
Soundcore Capital Partners, which invests in lower middle-market companies in the manufacturing, business services and specialty distribution sectors, has raised $350 million for its second fund. The fund will execute Soundcore's buy and build strategy of targeting businesses with recurring revenues and attractive margins. The firm looks to invest up to $70 million of equity in deals. New York-based Soundcore was founded in 2015 by Jarrett Turner and has since acquired 30 companies. Turner previously held roles at Sun Capital Partners and Cleaview Capital.
A vehicle drives past a Staples Inc. store in Clawson, Michigan, U.S., on Monday, Feb. 29, 2016. Staples is scheduled to release quarterly earnings results on March 4. Photographer: Sean Proctor/Bloomberg
Sycamore Partners, which counts Staples among its investments, has raised its third fund at $4.75 billion. The New York-based PE firm now has about $10 billion in assets. Sycamore paid about $6.9 billion for Staples in 2017. The firm has also invested in department store chain Belk, women's apparel brand Coldwater Creek and apparel retailer Hot topic.
Quantum Energy Partners, which backs oil drilling companies such as HG Energy, has raised its seventh private equity fund at around $5.8 billion. Quantum is a Houston-based energy-focused private equity firm. The firm was founded in 1998 by S. Wil VanLoh Jr. and Toby Neugebauer. Neugebauer and VanLoh are former investment bankers at Kidder, Peabody & Co. The two co-founded energy-focused investment bank Windrock Capital. Neugebauer's father is Randy Neugebauer (R-Texas), a former member of the U.S. House of Representatives.
As we head into the final quarter of 2020, Twin Brook Capital Partners’ Jennifer Dzwonchyk and Tony Maggiore discuss working with lower middle class companies and their private equity sponsors over the past several months and the amazing resilience many of these businesses have exhibited in the face of unprecedented challenges.