Atlantic Street shrinks target of latest flagship

Large managers have been forced to reduce targets due to a sluggish fundraising environment. Now smaller shops may endure this trend.

In a drab fundraising market, GPs are finding it tough to keep to fundraising timelines and hit their targets.

Some will have to limit their ambitions as they confront the reality of liquidity-constrained limited partners.

Atlantic Street Capital appears to be an example. The firm, in the market with its fifth fund, reduced its original $950 million target, according to documents from the Plymouth County Retirement Association. The firm is now targeting $750 million, the documents said.

An amended Form D filed with the SEC in November 2022 also confirmed the $750 million target for Fund V. Atlantic Street initially sought $950 million for the fund, according to an amended Form D filed with the SEC in April 2022.

Documents from September’s Plymouth County Retirement Association board meeting prepared by consultant Meketa revealed further details about Fund V.

Atlantic Street is charging a 2 percent management fee and 20 percent carried interest rate for Fund V, according to Meketa. The preferred return rate is 8 percent.

The fund is expected to close by the end of this month, Meketa said.

According to the November 2022 SEC filing, Atlantic Street has raised $413 million for Fund V.

Atlantic Capital raised $348 million as of the April 2022 SEC filing.

Los Angeles County Employees’ Retirement Association announced a $150 million commitment to Fund V in September 2021, according to LA County’s board minutes, making it the only LP known to have invested in Fund V.

It was not clear if Plymouth County’s board approved a potential $10 million commitment to Fund V at its board meeting.

According to Meketa, Fund V plans on investing in 12 mid-market healthcare and business services companies.

Fund IV, which closed in 2019 at $500 million, has invested in 12 platform companies with 65 add-ons, according to Meketa. The fourth fund has a 32.2 percent net IRR, having earned $255 million in realizations against $366 million in invested capital.

The 2016 vintage year Fund III has a 20.8 percent net IRR and has realized $146.8 million while investing $199.8 million. The 2011 Fund II has a 36 percent net IRR with $283.9 million in realizations after investing $74.3 million.

Based in Connecticut, Atlantic Street Capital was founded by managing partner Peter Shabecoff in 2006 after previously working at North Castle Partners.

Andy Wilkins, Atlantic Street’s other managing partner, has been at the firm since its inception, according to the manager’s website. Prior to that, he worked at Audax Group.

Atlantic Street Capital did not respond to a request for comment.