Insight Equity inches toward fund target

Dallas-based turnaround firm Insight Equity has closed on $361 million for its second fund, a $500 million effort it began raising almost a year ago, according to a regulatory filing.

The latest filing is a small improvement over the firm’s previous close. Just a month ago, Insight Equity closed on $312.5 million in commitments, according to a regulatory document at the time.

With the help of UBS as its placement agent, Insight Equity has garnered commitments from such LPs as Arkansas Teacher Retirement System, Alameda County Employees’ Retirement Association, West Virginia Investment Management Board and Los Angeles Fire and Police Pensions.

In light of the difficult fund-raising market, Insight Equity’s fund-raising plans can be called ambitious. The firm’s target on its second fund is double the $250 million it raised for its inaugural fund, which closed in 2005.

As previously reported by PE Week affiliate website peHUB during its last close, the firm’s second buyout fund has a waterfall carried interest plan that allows the general partners to collect greater than the standard 20% return on deals which earn more than 2.5x their investment. The carried interest on deals earning 2.5x to 4.5x is 25%, and the carry jumps to 30% for any deal returning more than 4.5x the fund’s investment.

In addition to its second buyout fund, Insight Equity is also raising a mezzanine fund targeted at $250 million. The firm has raised $111 million from 30 investors for that effort, up from $99 million last month, according to a regulatory filing.

A source familiar with the firm said that Insight was “strongly recommending” that new investors commit to both the mezzanine fund and the equity fund, a request that is sure to trigger disapproval from today’s newly emboldened investors.

Insight Equity did not respond to a request for comment. —Erin Griffith