Hellman & Friedman targets $8.9 bln for Fund VIII

Firm: Hellman & Friedman

Fund: Hellman & Friedman Capital Partners VIII LP

Target: $8.9 billion

Hellman & Friedman has been talking to limited partners and focusing on a recent flurry of its deals, particularly its exits, according to a source. 

Among the San Francisco firm’s recent deals, The Blackstone Group and GIC Private Limited said they would pay $750 million for a minority stake in Kronos Inc from Hellman & Friedman. The transaction, announced in February, valued the human resources software company at about $4.5 billion. Hellman & Friedman closed a dividend recapitalization in Kronos as part of the deal. 

Kohlberg Kravis Roberts & Co moved to buy Sedgwick Claims Management Services for $2.4 billion from Hellman & Friedman and Stone Point Capital in one of the largest sponsored M&A deals so far in 2014.

Hellman & Friedman inked a deal last November to buy Applied Systems from Bain Capital for $1.8 billion. JMI Equity also invested in Applied Systems.

Hellman & Friedman Capital Partners VII raised more than $8.8 billion, but fell short of its $11 billion target during a fundraising period that took place in late 2008 and 2009 in the wake of the collapse of Lehman Brothers.

“That was a very quick fundraise in trying circumstances,” said a person familiar with the firm’s effort at the time.

CEO Phil Hammarskjold, who joined the firm in 1992, now heads up the firm, which has raised more than $25 billion in the past 25 years. It also employs a deep bench of 17 managing directors, according to its website.

Hellman & Friedman Capital Partners VIII LP marks the latest in a series of big flagship private equity funds in the past several months, led by Apollo Global Management LP’s Apollo Investment Fund VIII LP, which took in $18.4 billion, and Carlyle Group’s Carlyle Partners VI LP, which drew in $12 billion. If successful, Hellman & Friedman’s fund would outpace the $7 billion raised for Blackstone Real Estate Partners Europe IV LP and Brookfield Infrastructure Fund II LP from Brookfield Asset Management.

The 2004 vintage Hellman & Friedman Capital Partners V LP rang up an IRR of 27.6 percent as of Sept. 30, 2012, for the Los Angeles City Employees’ Retirement System—good enough for a top quartile performance, according to fund data compiled by Buyouts. Hellman & Friedman Capital Partners VI recorded an IRR of 7 percent as of Dec. 31, 2012.

Hellman co-founded the firm in 1984 with Tully Friedman, who left the firm and founded FFL in 1997. Hellman died at the age of 77 and was serving as a senior adviser to the firm after handing over day-to-day operations.