Brightstar Capital shoots for $2bn in launch of third flagship fund

The fund comes almost exactly a year after the closing of Brightstar’s second flagship vehicle. Originally targeted to bring in $1bn, Fund II wrapped up at its $1.27 bn hard-cap.

Brightstar Capital Partners is targeting $2 billion for a third flagship buyout offering, double the goal set for the fund’s predecessor, sources told Buyouts.

The New York private equity firm, led by ex-Lindsay Goldberg partner Andrew Weinberg, began marketing Brightstar Capital Partners Fund III this month, sources said. Eaton Partners is the placement agent.

The fund comes almost exactly a year after the closing of Brightstar’s second flagship vehicle. Originally targeted to bring in $1 billion, Fund II wrapped up last spring at its $1.27 billion hard-cap.

GPs are bringing new offerings to market at a faster pace and often with bigger tickets. While PE fundraising conditions may soften in 2022 because of a more uncertain environment, well-known firms with established LP bases are expected to persevere.

Brightstar was founded in 2015 by managing partner and CEO Weinberg. During a 12-year tenure at Lindsay Goldberg, he served on the boards of some 13 portfolio companies. He was also a senior executive with Likewize, a device-lifecycle solutions provider later acquired by Brightstar’s Fund II.

Weinberg designed Brightstar to make control investments in mid-market companies, typically with EBITDA of $10 million to $75 million and revenue of $50 million to $1 billion. Opportunities are sourced in North America’s business services, consumer services, government services and technology and industrial services sectors.

Brightstar writes equity checks of $75 million to $500 million per deal. Post-investment, it draws on operational capabilities and networks to fuel organic and acquisition-driven growth.

A key focus of the strategy is partnering with families and founders, many of them undertaking succession events. The opportunity is part of a broader intergenerational transfer of wealth in the years ahead, which in the US is estimated to involve tens of trillions of dollars.

Mastering headwinds

In a January article for the World Economic Forum, Weinberg said mid-market companies will in a post-pandemic economy encounter major headwinds, such as inflation, fragile supply chains, loss of talent and the need to spend on priorities like innovation and decarbonization. Private equity, he argued, is in a unique position to help them address and overcome these challenges.

Since inception, Brightstar has closed 31 deals, ten of them platform investments and the rest add-ons. Recently acquired platforms include Novae, a multi-brand trailer manufacturer, announced in December, and XLerate, a used-car auction services provider, announced in September.

Earlier last year, the firm purchased ERC, an engineering and consulting services business. It also sold Capstone Nutrition, a nutrition and wellness products manufacturer, to Cornell Capital-backed INW.

Along with doing deals, Brightstar has been adding to its team, which today numbers more than 50. Recent hires include Maha Eltobgy, brought on last fall as chief sustainability officer and managing director. Previously the World Economic Forum’s head of investors industries, she will take on responsibilities like assisting portfolio companies with meeting their ESG objectives.

Weinberg oversees a leadership team that includes partner and president Renee Noto, formerly with Fifth Street Finance and Balcony Partners.

Brightstar at present manages $3.3 billion in assets. In addition to its New York headquarters, it has satellite offices in California, Colorado, Connecticut, Florida, Missouri and Tennessee.

Brightstar declined to provide a comment on this story.

(This story was updated to correct Brightstar’s investment range.)