Brockway Moran Closes Fund III

Firm Name: Brockway Moran & Partners Inc.

Fund Name: Brockway Moran & Partners Fund III LP

Target: $600M

Total Raised: $700M

Fundraising Advisor: Credit Suisse First Boston

Legal Counsel: Kirkland & Ellis LLP

Brockway Moran & Partners‘ latest fundraising drive proves that limited partners don’t only come running for the multi-billion-dollar investment vehicles. The Boca Raton, Fla.-based firm, which adheres to a disciplined investment strategy that includes a transaction value cap at $250 million, spent a mere three months raising its $700 million Brockway Moran & Partners Fund III LP.

“All the activity in 2005 went right into 2006, at least as far as the first quarter is concerned,” Peter Brockway, a managing partner at the firm, told Buyouts.

“We got the process rolling in January, printed out the PPM in the second half of February and closed at end of March.”

Fund III carried a target $600 million, but it was almost immediately clear that the firm was going to hit it’s hard cap. “We had pages and pages of people we met over the years lined up for this fund,” Brockway said. “Demand was way in excess of what we were aiming for. The challenge was trying to be respective of people’s time.”

Roughly 80% of Fund III’s limited partners were investors in the firm’s second fund, including Goldman Sachs, Adams Street Partners, Wilshire Associates, Pathway Capital Management, HarbourVest Partners, Shott Capital Management, Private Advisors, Princeton University, Massachusetts Institute of Technology, University of Chicago, Virginia Retirement System, Bessemer Trust, State of Michigan, GE Antares Capital, PPM America and St. Paul Travelers.

First-time investors with Brockway Moran that hopped aboard on Fund III include Commonfund Capital, Mesirow Financial, University of Virginia, Georgia Tech, Alfred I. duPont Testamentary Trust, Boeing Company, The William and Flora Hewlett Foundation, RCP Advisors, AlpInvest Partners and Northern Trust.

According to Brockway, Fund III has a total of 34 limited partners and carried a $5 million minimum investment limit. Credit Suisse served as an advisor to Brockway Moran throughout the fundraising process, and also is a return investor with the firm.

Brockway Moran is still investing from its vintage-2002 second fund, which raised a total of $410 million. Fund II is between 75% to 80% invested and still has enough dry powder to make two more platform investments, Brockway said. The firm’s first fund, raised in 1998, was steward to $200 million in LP commitments. “With all of our funds, we hit the hard caps, that’s one commonality,” Brockway said. He declined to comment in detail on the performance of the older two investment vehicles.

The decision to increase Fund III’s total capitalization almost $300 million over its predecessor does not reflect a desired change in deal size for the firm, Brockway noted. Instead, it is a sign of the firm’s desire to be more independent. With respect to Brockway Moran’s first two funds, the firm, at times, found it necessary to bring in co-investors when deal sizes reached the $200 million to $250 million level, Brockway said. “We were having issues when it came to convincing people that we would have the equity to support both the acquisition and the add-on strategy once the deal closed. But with Fund III, that won’t be an issue.” —A.N.