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Chicago Shop Taps Agent To Help Raise Fund III

Firm: Chicago Growth Partners

Fund: Chicago Growth Partners III LP

Target: $500 million (likely)

Placement Agent: MVision Private Equity

Executives at Chicago Growth Partners plan to start raising their third fund later this year, two sources familiar with the firm’s plans told Buyouts.

The firm has not decided on a firm target yet for the fund, Chicago Growth Partners III LP. But it will likely seek around $500 million, the same amount Chicago Growth raised for its second fund, which closed in May 2008.

Chicago Growth has hired MVision Private Equity Advisers, a placement agent with offices in London, New York and Hong Kong, to help it raise the fund. The firm used placement agents sporadically in raising its second fund, one of the sources said, though no single agent was responsible for the overall effort.

Chicago Growth invests $15 million to $75 million of equity in buyouts and growth equity investments. Target industries include education, health care, tech-enabled services and industrials.

The firm’s hiring of MVision suggests Chicago Growth is looking to expand upon an already healthy amount of international investors. Approximately one-third of investors in Fund II are based in Europe, according to one of the sources.

According to Capital IQ, these include Skandia AB of Sweden, RWB AG of Germany, and Swiss Re Private Equity Partners AG, backed by Swiss Reinsurance Co. of Zurich. Domestic investors include Goldman Sachs and the Minnesota State Board of Investments.

Chicago Growth spun out of William Blair Capital Partners, the former buyout arm of the investment bank William Blair & Co., in 2004. The firm raised $270 million for its debut fund. Managing Partners David Chandler, Robert Healy and Arda Minocherhomjee, all alums of William Blair Capital, oversee about 12 other investment professionals, along with several operating executives.