Charterhouse To Seek $750 Million For Fund V

Firm: Charterhouse Group

Fund: Charterhouse Equity Partners V LP

Target: $750 million

A string of lucrative exits in 2007 has positioned LBO shop Charterhouse Group to launch a new fund in early 2008. The New York-based firm plans to raise in the neighborhood of $750 million for Charterhouse Equity Partners V LP, according to a source close to the firm.

The firm expects to make between 12 and 15 investments out of the new fund, writing equity checks ranging between $40 million and $60 million. The shop typically follows a buy-and-build strategy, often deploying equity alone to finance platforms and add-ons at the beginning of a roll-up, adding leverage later as the company matures.

Charterhouse Group has exited five companies in 2007, netting a combined 3.3x on invested capital for the firm’s limited partners, according to our source. The firm has spent more than 75 percent of its fourth fund, a $447 million vehicle closed in 2004.

The exits began in March, when Charterhouse Group scored a five bagger by selling business process outsourcing firm Lason Inc., which required a turnaround effort. Over the summer, it divested its interest in Oakleaf Holdings, a waste management logistics company that returned 7x invested capital. Other recent exits include the sales of financial data company Albridge to PNC Financial Corp.; vehicle logistics firm United Road to the Gores Group; and medical transportation company Logisticare to Providence Service Corp.

Charterhouse Group, started up in 1973, has raised institutional money since 1989. Previous investors AlpInvest, Goldman Sachs Group, JPMorgan Chase & Co. are expected to anchor the new fund.—J.H.