Charterhouse to seek $750M for fifth fund next year

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 about $750 million for Charterhouse Equity Partners V, according to a source close to the firm. The firm has spent more than 75% of its fourth fund, a $447 million vehicle that closed in 2004.

The firm expects to make between 12 and 15 investments out of the new fund, writing equity checks that range 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 the source.

The exits began in March when Charterhouse Group sold 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 in 1973, has raised institutional money since 1989. Previous investors AlpInvest, Goldman Sachs Group, JPMorgan Chase & Co. are expected to anchor the new fund. —Jeremy Harrell