Audax inches past target for new flagship private equity fund

Audax Group exceeded the target set for its seventh flagship mid-market offering, despite on-going headwinds in fundraising.

Launched a year ago, Audax Private Equity Fund VII raised just over $5 billion, Form D documents said, putting it above a projected $4.75 billion target, reported last June by Buyouts. Stifel’s Eaton Partners is the placement agent.

It is not known if Audax is planning to continue capital raising. It declined to provide a comment.

At $5 billion, Fund VII is already the largest pool in the firm’s more than two-decade history, topping by 43 percent its $3.5 billion predecessor closed in 2018.

Private equity fundraising in the North American market slowed in 2022, with $528 billion secured by 988 vehicles, according to Buyouts data. Conditions are expected to persist or worsen this year, due to tighter supply caused by overstretched LPs. For many GPs, this will likely mean longer timelines and, potentially, pressure on targets.

Audax, made up by Audax Private Equity, Audax Private Debt and Audax Strategic Capital, was founded in 1999 by co-CEOs Geoffrey Rehnert and Marc Wolpow.

Audax Private Equity is led by co-presidents Young Lee and Keith Palumbo and partners Adam Abramson, Donald Bramley, Timothy Mack, Jay Mitchell, Joe Rogers and David Wong. The flagship strategy is focused on making control investments in mid-market businesses with annual EBITDA of $15 million to $65 million and enterprise values of $125 million to $500 million.

Target companies are niche market leaders operating in six core sectors: business services, consumer, financial services, healthcare, industrial services and technologies, and software and technology. Audax typically invests equity of $75 million to $200 million, inclusive of add-on acquisitions.

Audax Private Equity also has an Origins strategy that complements the flagship but with an eye on lower mid-market businesses.

Fund VII is expected to make 33 to 36 platform investments, a presentation made last year to Louisiana State Employees’ Retirement System said.

Audax Private Equity reports closing more than 160 platform investments and 1,200-plus add-ons since inception.

Recent deals include a growth investment, announced this month, in Pyramid Laboratories, a drug product contract development and manufacturing organization. Audax also in April said it acquired Krayden, a distributor specializing in adhesives, sealants, solder, coatings, specialty chemicals and solvents, from Quad-C Management.

Audax Strategic Capital, the Boston firm’s newest strategy, was unveiled in December. Secondaries-like in nature, it makes non-control investments with GPs looking to extend their holds over certain assets, but which need help completing M&A, Buyouts reported.