The shop, which this month added Gary Crittenden, previously the CFO of Citigroup, to its staff as managing director, plans to engage in mid-market buyouts and growth equity investments, targeting companies with annual EBITDA of $25 million to $50 million.
“We believe that the middle market—where funds have historically enjoyed higher returns than mega funds—is the right place for us to concentrate in successfully deploying the fund,” said co-founder Jon Huntsman in a statement.
Huntsman, the founder of the chemical company that still bears his surname, formed the firm in 2007 with Bob Gay, a former managing director at Bain Capital.
Limited partners include fund of funds manager AlpInvest Partners, the California Public Employees’ Retirement System, the California State Teachers’ Retirement System and the Massachusetts Group Insurance Commission, according to Thomson Reuters (publisher of PE Week).
The pledge from CalPERS was a sizeable $180 million chunk of the overall fund. As of Dec. 31, 2008, Huntsman Gay had called down slightly less than $21 million worth of that capital.
Huntsman Gay described its LP pool as “a mix of institutions, and public pension investors, family offices and high-net worth individuals,” and noted that the firm’s partners and professionals are also significantly invested in the fund, reportedly providing 10% of its capital.
In its statement, the Palo Alto, Calif.-based firm said the pool exceeded its target of $1 billion, although a regulatory filing with the Securities and Exchange Commission in April 2008 for Huntsman Gay Capital Partners Fund I listed a target of $1.25 billion.
Sectors of interest for Huntsman Gay include manufacturing, industrials, consumer products, technology, business and financial services, chemicals, infrastructure and health care.
The firm has already completed an investment with the fund. It purchased Turner Bros. Holdings, a Houston-based provider of lifting and transportation products and services, such as cranes and rigging equipment, in October 2008 from Saw Mill Capital. Financial terms of the deal weren’t disclosed.
Philanthropy plays a prominent role at Huntsman Gay, as both co-founders are expected to give 100% of their share of the firm’s carried interest to charitable organizations, according to peHUB.com, an affiliate website to PE Week, while certain other partners are likely to donate portions of their shares.
Charities highlighted on the firm’s website include the Anasazi Foundation, the BYU Center for Economic Self-Reliance, Christmas Box House, Forever Young Foundation, Olive Crest, Realizing the Dream, Right to Play and the Huntsman Cancer Institute and Hospitals. —Michael Baron