Firm: High Street Capital
Fund: High Street Capital IV LP
Target: Approx. $100 million
Expected Launch: First quarter, 2010
Placement Agent: Ariane Capital Partners LLC
The Chicago-based firm’s third fund,
In addition, High Street Capital hopes to draw other institutional investors in North America and Europe to Fund IV. The firm has hired Ariane Capital Partners LLC, a Villanova, Pa.-based placement agency, to assist with marketing. Meanwhile, professionals at High Street Capital plan to provide about 8 percent of Fund IV’s total capitalization, a source said.
“The hope is that Fund IV will be absolutely middle-of-the-road” in terms of management fees and carried interest, a source said, noting that the new vehicle would likely match Fund III’s 2 percent management fee and 20 percent carried interest.
High Street Capital plans to maintain its strategy of investing in companies generating revenues up to $100 million. In a departure, however, it plans to exploit the larger vehicle to fully underwrite the equity portions of its deals, rather than sourcing transactions and then relying on equity co-investments from mezzanine firms or other buyout shops, as it has in the past. Typical equity checks written by the firm are expected to increase to about $10 million from $5 million, one of our sources said.
High Street Capital’s most recent acquisition closed in August 2008, with the buyout of Koontz-Wagner Electric, a South Bend, Ind.-based provider of electrical control systems that are used in the power generation and oil and gas sectors. Chicago-based mezzanine debt provider
Other firms that have co-invested alongside High Street Capital include
For operational reasons, the firm targets platform companies that are within a two-and-a-half hour flight from its Chicago headquarters—putting most investments east of the Rocky Mountains with a particular focus on the Midwest, a source said. Industry-wise, the firm likes health care services, outsourced business services and niche manufacturing, among others. Areas the firm steers clear of include retail and consumer products-related companies, as well as financial services and real estate.