Sentinel Capital raises billions to pursue add-on and tuck-in acquisitions

Lower middle-market private equity firm Sentinel Capital Partners has closed its sixth private equity fund, called Sentinel Capital Partners VI L.P., with $2.15 billion in capital commitments. Concurrent with the closing of Fund VI, the firm has also raised $460 million in capital for its inaugural Sentinel Junior Capital I L.P. fund.

“We are delighted by this fundraising outcome and grateful for the strong show of support from our existing investors and several new prominent investors,” states Sentinel managing partner David Lobel. “We are also very pleased to launch our inaugural junior capital fund, which will serve the financing needs of our lower middle market companies.”

The firm will deploy the same investment strategy it has used with previous funds, partnering with management teams to acquire businesses with up to $65 million in Ebitda across the aerospace and defense, business services, consumer, distribution, food and restaurants, healthcare and industrial sectors. For Sentinel’s platform investments, the firm will continue to pursue small tuck-in and “transformational” add-on acquisitions as part of its strategy.

The junior capital fund will primarily serve as mezzanine financing source for the new Sentinel platform businesses. Both funds received capital from a variety of investors, including: college and university endowments, foundations, state and government retirement systems, corporate pension plans, insurance companies, sovereign wealth funds, investment advisors, family offices, and Taft-Hartley plans located in the U.S., Europe, China, Japan, Australia and the Middle East.

Other middle-market fund raises include: Morgan Stanley (NYSE: MS) closing its debut PE fund; Ridgemont Equity Partners’ raising $320 million to invest in the energy sector; Brynwood raising its eighth fund, the largest in the firm’s history to date, in January; Blue Wolf Capital Partners LLC’s closing a $540 million PE fund; Private Advisors’ raising the firm’s seventh small business PE fund; Saw Mill Capital’s closing of a new investment fund with $340 million in commitments; Industrial Opportunity Partner’s (IOP) raising its third fund with $450 million; Platte River Equity'sclosing the firm’s fourth fundraise; CVC Capital Partners’ $18 billion fund to target U.S. and European investments; the Riverside Co.’s first minority investment fund in April 2017.