American Industrial Partners Closes Fund IV With $405M

American Industrial Partners, a middle-market buyout shop that targets industrial businesses, held the final closing of American Industrial Partners Capital Fund IV LP in mid-August at $405 million, slightly exceeding its $400 million target.

Sixty percent of the capital commitments made by the fund’s 24 LPs came from new backers, said partner Kim Marvin, including FLAG Capital Management, Goldman Sachs, Grove Street Advisors, Investure, John Hancock Life Insurance Co. and Parish Capital. Returning LPs include HSBC and Partners Group. Three pension funds committed a total of $75 million. Endowments were also well represented, said Marvin, as were gatekeepers, insurance companies and funds of funds; 84 percent of the capital commitments came from North America, 12 percent from Europe and 4 percent from Asia. The GP itself placed $14 million into the fund.

Established in October 2006, Fund IV originally had a hard cap of $600 million. But it was later lowered to $400 million, said Marvin. The firm held an early first closing with a few existing investors at the end of January 2007. MVision Private Equity Advisers came on board as the global placement agent in June of last year. American Industrial Partners charges the standard 2 percent management fee and 20 percent carried interest.

Since April 2007, the firm has spent a total of $50 million on three acquisitions for the fund, with a fourth purchase expected to close in a few weeks. American Industrial Partners intends to make 10 to 12 investments altogether for the fund, at a rate of three per year, focusing on corporate carve-outs of U.S. industrial companies, said Marvin.

American Industrial Partners has invested in private equity since 1989 and is helmed by Marvin, John Becker and Dino Cusumano, who have worked together for 10 years. The firm’s previous fund totaled $238 million.