- Expects final close by year-end
- Targeting $500 mln, with $600 mln hard cap
- Fund VIII netting 12.42 pct IRR
Banc Funds, a Chicago-based firm led by Charles Moore, launched Banc Funds IX in 2014 with a $500 million target and $600 million hard cap. Limited partners in the fund include the Washington State Investment Board and Minnesota State Board of Investment, according to public documents. Banc Funds has not employed a placement agent for Fund IX.
The firm expects to hold a final close by the end of the year, a market source told Buyouts.
Fund IX will acquire minority stakes in small U.S. banks, directing its efforts toward institutions located along the coasts, or in Texas and the Southeast, Moore told panelists during a “shark tank” panel held at the Buyouts LP-GP Summit in September.
The firm typically limits the size of its stakes to less than 10 percent of a bank’s equity to avoid regulations that apply to bank holding companies, Moore said. Even so, the firm is typically the only institutional investor in its portfolio companies and “the most knowledgeable investor,” he said.
While Banc Funds vehicles have generated strong returns historically, the firm’s $450 million fund raised prior to the global financial crisis suffered after small banks and financial institutions stumbled through in the downturn.
That fund, Banc Fund VII, was netting a negative 1.5 percent IRR as of Sept. 30, according to Washington documents.
The firm bounced back with Fund VIII, a $650 million vehicle that netted a 12.42 percent IRR through Sept. 30, according to Washington documents.