Imperial Capital targets $350M for fund IV

Imperial Capital has scaled back on the target for its fourth buyout fund after heeding advice from some of its investors.

The Toronto-based firm is targeting between $300 million and about $355 million for the fund, Imperial Capital Acquisition Fund IV, says a source familiar with the fund-raising effort.

Imperial Capital hit the market with a $500 million target. But the firm racheted back after a few key limited partners said that the target was too big a leap from the firm’s $130 million third fund, which closed in 2000.

The firm began raising the fund in January and closed on about $50 million from wealthy individual investors at the end of February. Executives expect to hold a second close on another $100 million from institutional investors at the end of July, says the source.

Imperial Capital typically gives itself a year to raise funds, which would put the close date near the end of the year. But the firm may leave the door open through the first quarter of 2009 for institutional investors.

The firm specializes in buying Canadian or U.S. companies and expanding their operations throughout North America via acquisitions. Imperial Capital’s portfolio includes Kenra, an Indianapolis-based maker of ethnic hair care products that it bought in February 2007; and Lise Watier Cosmetiques Inc., a Montreal-based cosmetics maker bought in March 2007.