American Securities seeks $7bn for latest flagship

The firm had closed its predecessor Fund VIII in 2018, exceeding its $6bn target.

American Securities is seeking the same amount it raised for its predecessor flagship fund with its latest vehicle.

The New York-headquartered firm aims to raise $7 billion for American Securities Partners IX, according to documents prepared for the Massachusetts Pension Reserves Investment Management Board‘s 30 November board meeting.

The fund launched in November last year and held its first close in July this year on $92.69 million, according to Private Equity International data.

Boston-based pension giant MassPRIM approved a commitment of up to $150 million to the fund, according to PEI data. MassPRIM has invested in four previous American Securities funds and completed two co-investments with the firm since 2008, the documents noted.

The fund also received a commitment of $150 million from the University of Texas/Texas A&M Investment Management Company in February, PEI data shows.

American Securities declined to comment.

MassPRIM’s previous investments in American Securities have demonstrated strong performance relative to industry benchmarks, according to the board documents. The pension also cautions that the performance of Fund IX may be susceptible to changing economic conditions due to the firm’s investments in sectors with high sensitivity to economic cycles.

Predecessor fund American Securities Partners VIII launched in 2017 and closed in 2018 with $7 billion in commitments, exceeding its $6 billion target. Fund VIII delivered an internal rate of return of 22.03 percent and a total value to paid-in ratio of 1.46x for UTIMCO as of the end of March, according to PEI’s database.

Commitments to Fund VIII include the $200 million from the Teacher Retirement System of Texas, $150 million from MassPRIM and $100 million from the Teachers’ Retirement System of Louisiana.

American Securities is a value-oriented manager specialising in the industrial sector. The firm also invests in business services, healthcare services and consumer sectors, according to the MassPRIM documents. It typically makes investments in the range of $300 million-$700 million, the firm’s website indicates.