Providence Equity Partners last month capped a short fund raising by holding a first and final close that garnered $940 million for the firm’s third fund, said Jonathan Nelson, president of Providence.
The Providence, R.I.-based firm kicked off fund raising in early August for Providence Equity Partners III, L.P., seeking a target of $750 million (BUYOUTS Aug. 17, 1998, p. 6).
Although Mr. Nelson declined to name limited partners that signed on for Fund III, he noted that two-thirds of the capital raised came from prior L.P.s. Commitments ranged between $10 million and $100 million with an average size of approximately $35 million, he added.
The firm’s last fund closed on $363.5 million in 1996 (BUYOUTS Nov. 11, 1996, p. 5) and received commitments from limited partners that included Ontario Teachers’ Pension Plan, Oregon Public Employees’ Retirement System, Fleet Equity Partners, Alliance Capital Management, California Public Employees’ Retirement System, GE Capital Equity Capital Group, New York State Common Retirement Fund, Rhode Island Employees’ Retirement System and Toronto Dominion Capital.
The increased size of Fund III-which will target buyout and later-stage venture capital deals in the media and telecommunications industries-was merited by Providence’s shift of focus from mainstream media companies to telecommunications companies, Mr. Nelson said. “It’s based on opportunities that we see right now,” he said. “As we go forward, telecomms will require increased growth capital, which explains the size and the focus of the fund.”
The fund likely will make equity investments of $75 million per deal, although Mr. Nelson noted that equity commitments in some cases could be significantly greater.
Donaldson, Lufkin & Jenrette served as placement agent for the effort.