Bank Spin-Out Closes First Indie Fund Well Below Target

-

Snapshot

Firm: GCP Capital Partners

Fund: GCP Capital Partners III LP

Raised: $300 million

Placement Agent: Greenhill & Co.

GCP Capital Partners, the former private investment arm of investment bank Greenhill & Co., quietly closed its third fund in January with $300 million in commitments, a source close to the fundraising effort told Buyouts.

The finally tally was a good $400 million less than the fund’s $700 million target. The source said a number of limited partners are cutting back on commitments to private equity, and that the GCP Capital team was eager to start investing.

The firm typically writes equity checks of $10 million to $75 million per transaction, targeting companies in the business services, financial services, education, energy, insurance and telecommunications sectors. Target companies usually have enterprise values of $50 million to $500 million.

GCP Capital originally had planned to begin raising capital in January 2009, but like many buyout shops delayed the fundraising during the economic downturn. In 2008, when they were planning the fund, firm executives had anticipated raising $1 billion to $1.2 billion, according to Buyouts archives.

The firm raised $875 million in 2005 for its second fund, which has achieved a net investment multiple of 2x and a net IRR to investors of more than 30 percent, a source previously told Buyouts.

GCP Capital Chairman Robert Niehaus led a $25 million buyout of the private equity division of publicly traded Greenhill in 2009 after the investment bank decided to concentrate on its advisory practice. The firm has a total of seven investment professionals, according to its Web site.

The firm has made at least two investments this year, both in companies based in London, according to Capital IQ. In February it invested £10 million ($15.8 million) in BriefingMedia Ltd, provider of news for the media industry; and in January it bought World Trade Group Ltd, an organizer of business-to-business events for the energy, pharmaceutical and other industries, for £27.5 million.

Niehaus did not respond to efforts to reach him for comment.