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Charlesbank targets $800m for overage fund

The fund will invest alongside the firm's latest flagship on deals that require larger amounts of equity.

Charlesbank Capital Partners is targeting $800 million for the overage vehicle it is raising alongside its latest flagship fund, according to meeting materials from Massachusetts Pension Reserves Investment Management Board.

MassPRIM’s materials say Charlesbank Equity Fund X‘s “size” is $3.75 billion, though a presentation Charlesbank recently gave to Rhode Island State Treasury said that was the fund’s hard-cap while the target was $3.25 billion. Sources also told Buyouts that $3.25 billion was the fund’s target.

Cliffwater, Rhode Island’s consultant, said last month the overage fund would come into play when the flagship wants to invest in companies that require equity investments greater than $300 million, as Buyouts reported.

The overage fund will charge carry but no management fees. Fund X is charging the industry standard 2 percent management fee, 20 percent carry and 8 percent hurdle. It will make between 15 and 20 investments in companies with enterprise values between $150 million and $3 billion.

The fund’s target sectors include business services, consumer, healthcare, industrials, and technology & technology infrastructure.

Charlesbank was formed in 1998 by five veterans of Harvard Management Company‘s private equity group. Two of the founders, Michael Eisenson and Kim Davis, will be involved in Fund X as co-chairmen. Michael Choe is the chief executive officer. The firm has $7.4 billion in assets under management.

Action Item: read the most recent MassPRIM performance summary here. Read the Charlesbank presentation to Rhode Island here.