Genstar targets $5 bln for largest flagship fund yet

  • Could tally more than $5 bln with overage capacity
  • Closed Fund VIII in 2017
  • Recent funds are strong performers

Genstar is back in market with its next flagship vehicle, targeting up to $5 billion for what will be its biggest fund yet if it reaches its goal, according to pension documents and a source with knowledge of the firm.

Genstar is raising Genstar Capital Partners IX along with an overage pool that could bring the final tally above $5 billion, the source told Buyouts.

The firm in 2017 closed Fund VIII on $3.95 billion, which included $3.1 billion in LP commitments and $650 million of overage capacity from select LPs, a statement from the firm said at the time.

The GP committed $200 million to Fund VIII. How much Genstar will invest in Fund IX is unclear.

The San Francisco firm will make control investments primarily in the North American middle market. It targets healthcare, financial services, software and industrial technology.

Genstar is led by a group of managing directors including Chairman Jean-Pierre Conte, President Ryan Clark, Rob Rutledge, Tony Salewski, Eli Weiss and Katie Solomon.

Genstar’s performance in recent funds appears strong. Fund VIII was generating a 41.24 percent internal rate of return since inception as of Dec. 31, 2017, performance information from Colorado Public Employees Retirement System shows.

Fund VII, which closed on just over $2 billion in 2015, was generating a 98.2 percent IRR as of that date, Colorado PERS data shows. The sixth fund, which raised $1 billion in 2012, was producing a 43.36 percent IRR since inception, according to Colorado PERS.

In November, Genstar announced the acquisition of 2-10 Home Buyers Warranty, which provides home-warranty products to homeowners and new-home builders.

Preeti Singh contributed to this report.

Action Item: Check out Genstar’s Form ADV here: