Firm: Endeavour Capital
Fund: Endeavour Capital Fund VII
Target: $700 mln
Amount raised: $775 mln
John von Schlegell, managing director, said it’s unusual for a private equity firm to remain below 10 figures for a seventh-generation fund.
“It’s an unnatural act for guys like us to turn down money, but if you’re going to stay focused in a certain segment size and region like we do, you can’t do $1 billion-plus funds,” he said.
Partly to accommodate LPs that wanted to write bigger checks, Endeavour Capital raised an additional $100 million over its $675 million Fund VI in 2011. Fund of funds manager HarbourVest signed on as a new LP, but most of the firm’s investor base remained the same. Washington State Investment Board and the Oregon Investment Council have been longtime LPs.
The larger dollar size may give Endeavour Capital more flexibility to pursue bigger deals, but for the most part the firm expects the new fund’s average acquisition to remain about the same, von Schlegell said. “We’re a pheasant-hunting fund, but once in a while an elk will walk through,” he said.
He expects 10 to 12 platform deals in Endeavour Capital Fund VII.
Overall, the focus of the fund remains on three deal types: food and consumer, health care, and transportation and logistics. Endeavour Capital searches for targets from the Rocky Mountains to the West Coast.
“The biggest story is how little has changed,” von Schlegell said. “We’ve got mostly the same LPs, the same strategy, the same kind of philosophy with West Coast middle-market buyouts — the same focus as when we started in 1990 and 1991.”
LPs appreciate Endeavour Capital’s lack of style drift in its series of funds, but they also wanted to invest in chunks of $50 million to $75 million, he said. That drove up pressure to raise a bigger fund, he said.
Washington State Investment Board committed $95 million to Endeavour Capital Fund VI in 2011, which logged an IRR of 6 percent as of June 30, according to the pension fund’s website. Washington’s $65 million commitment to Endeavour Capital Fund V in 2008 notched a 9.1 percent IRR as of the same date; its $50 million investment in the vintage 2004 Fund IV logged an IRR of 25.8 percent as of the same date.
Washington State Investment Board committed $150 million to Endeavour Capital Fund VII, Buyouts reported on Dec 19.