Firm: Audax Group
Fund: Audax Private Equity Fund IV
Target: $1 billion
Amount Raised: $1.25 billion
Placement Agent: None
And at that, the firm still couldn’t meet the demand by investors for Fund IV, Geoffrey S. Rehnert, a co-chief executive officer, told Buyouts. “We’re pleased to have our fund raised, and we’re pleased to have been oversubscribed,” Rehnert said. The firm had to turn several prospective investors away, and some others had to accept commitment levels that were lower than they had been willing to make, he said.
The limited partners came mainly from mainly in North America, Europe, and Australia, according to the Audax Group press release announcing the fund’s close. Rehnert declined to identify any Fund IV investors, but known LP investors in prior Audax funds include the Alaska Permanent Fund Corp., the California Public Employees’ Retirement System, the Kansas Public Employees Retirement System, the Kentucky Teachers’ Retirement System, the New Hampshire Retirement System and the Pennsylvania State Employees’ Retirement System, according to the Thomson One private equity database.
Fund IV also received commitments from endowments, foundations and corporate pension plans, Rehnert said. The firm did not use a placement agent to raise the pool.
Fund IV already has begun to put capital to work; Rehnert said the vehicle has closed on four deals since Thanksgiving. The only one he mentioned by name was Thalheimer Brothers Inc., a Philadelphia-based processor of non-ferrous scrap metals. Terms were not disclosed.
Audax Group describes itself as a generalist investor, but the firm has a number of areas where it particularly focuses its efforts. Among them are niche manufacturing and specialty industrials, distribution and direct marketing companies, business services, health care, building products and technology and media.
In general, the firm seeks to write equity checks of $10 million to $100 million in transactions valued between $15 million and $250 million, according to the firm’s Web site. The firm was founded in 1999 by Rehnert and Marc B. Wolpow, both of whom had been managing directors at Bain Capital. Rehnert had been part of the group that founded Bain Capital in 1984, while Wolpow, who joined in 1990, several years after its founding, in 1997 established Sankaty Advisors Inc., Bain Capital’s credit-investing arm.
Audax Group also has teams dedicated to mezzanine investing and senior debt investing. Overall, the firm manages more than $5 billion of capital and has 70 investment pros on staff, according to the Web site.
The new fund is a successor to Audax Private Equity Fund III, a $1 billion fund raised in 2007. As of Dec. 30, 2011, Fund III was reporting a return multiple of 1.30x and an IRR of 12.6 percent according to CalPERS, continuing a history of steady results. The 2005 vintage Fund II reported a multiple of 1.60x and an IRR of 12.7 percent, according to CalPERS, while the firm’s inaugural, 2000-vintage fund generated a 1.50x return and a 12.3 percent IRR, according to investor California Emerging Ventures.