Despite Defections, Va. Firm Raising Eighth Fund

Quad-C Management Inc. has started raising another fund for the first time since losing a portion of its New York team and scratching an effort to expand in China.

The Charlottesville, Va.-based firm is seeking $900 million for Quad-C Partners VIII, according to two sources, including a limited partner, familiar with the firm’s plans.

Quad-C typically makes control equity investments of $25 million to $150 million in companies valued between $50 million and $500 million. The firm invests across a wide variety of industries, including health care, building products, education, restaurants and specialty chemicals. Quad-C raised $850 million for is previous fund in 2005, along with a $122 million co-investment vehicle.

The new fundraise comes about three years after general partners Gary Binning and Edward Harvey, along with principals Bob Haswell and Ashish Rughwani, who were based in New York, left the firm to start their own shop, Dominus Capital LP. That firm, also based in New York, is also in the market, seeking $250 million for its debut fund.

Quad-C, which still maintains a New York office, also appears to have abandoned a plan to expand into China. In September 2009, Kenneth Lee, a managing director at Quad-KAI Capital, Quad-C’s Chinese arm, retired. He had joined the firm in 2008 to set up its Beijing office, according to PEI Asia. The same report said that Quad-C intended to raise capital for a China-focused fund at the end of 2009. However, there is no information about the China office on Quad-C’s web site, as there had been at one time, and both sources said it was their understanding that Quad-C had ended the China program.

Despite these setbacks, our LP source said the firm has posted “solid results” and is “pretty well liked by LPs.” Quad-C’s backers have included major pensions and endowments, including the Los Angeles County Employees’ Retirement Association and Harvard Management Co.

As recently as August, Quad-C was still deploying capital from its seventh fund. Buyouts reported in its Aug. 16 edition that the firm was tapping Fund VII to buy Joerns Healthcare LLC, a company that makes beds and other products for the health care industry. The seller was fellow buyout shop Vestar Capital Partners.

Anthony Ignaczak, president of Quad-C, did not respond by deadline to calls and e-mails seeking comment.