Hellman & Friedman Poised To Close On $8.4B Fund VI

Hellman & Friedman has watched its peers break into the realm of mega fundraising. After raising a $3.5 billion fund in 2004, it has wasted no time in joining their ranks.

The firm is ready to close on its sixth fund, Hellman & Friedman VI LP, thanks to $8.4 billion in commitments, including $250 million from the firm. The target for the fund was $8 billion. Several limited partners confirmed that the closing was imminent, though the firm declined comment.

Among returning LPs is Los Angeles City Employees’ Retirement System, which signed up for $20 million. Previous backers include Bell Atlantic Corp., Chase Capital Partners, Columbia University, the New York State Comptroller’s Office and the Virginia Retirement System.

Hellman & Friedman has offices in San Francisco, London and New York and it raised its first fund in 1987, three years after inception. It prefers writing equity checks in the range of $200 million to $750 million. Favorite industries are media, telecommunications, financial services, technology and marketing. The firm doesn’t take fees from portfolio companies, except when participating in club deals.

High-profile deals sponsored by Hellman & Friedman include its $225 million minority-stake investment in advertising giant Young & Rubicam, and the take-private of Internet advertising company DoubleClick Inc., which it bought along with JMI Equity.

The firm made a splash in 2004 buying Texas Genco Holdings for $3.7 billion as part of a consortium that included The Blackstone Group, Kohlberg Kravis Roberts & Co. and TPG. By the standards of energy LBOs in 2004, the deal was huge, though it is now dwarfed by the proposed $45 billion LBO of Texas power company TXU Corp. The consortium sold Texas Genco for $8.3 billion, generating a large windfall, after a hold period of under two years.

TXU is reportedly trying to find a competing bid for its current buyout agreement, and Hellman & Friedman is on the short list of firms that could assemble a rival offer.—M.C.