JLL Partners collected more than $686 million for its eighth flagship buyout fund, according to a Form D fundraising document.
The amount raised, which reflects commitments from 53 limited partners, accounts for about 55 percent of the $1.25 billion target set for JLL Partners Fund VIII. The target was disclosed late last year in a report by New Jersey Division of Investment, which committed $200 million.
JLL’s general partner team is investing at least 5 percent of the total fund, the New Jersey report shows. Fund VIII will charge a 2 percent management fee during the investment period and 1.25 percent of actively invested capital thereafter. The carried-interest rate is 20 percent, while the hurdle rate is 8 percent.
If Fund VIII reaches its goal, it will be the largest pool raised in the New York-based private equity firm’s 31-year history. It will be 25 percent larger than Fund VII, which closed in 2016 at $1 billion.
Disclosed investors in Fund VII include Colorado Public Employees’ Retirement Association, Neuberger Berman, New Jersey, Montana Board of Investments, Regents of the University of California and Travelers Companies.
JLL did not respond to a request for comment on its fundraising activity.
Fund VIII will likely maintain JLL’s existing strategy, which is focused on making control-stake investments in North American mid-market businesses in sectors like healthcare, industrials and business services. The fund is expected to deploy $75 million to $200 million per company, according to the New Jersey report.
JLL specializes in backing businesses experiencing regulatory, operational or financial challenges that prevent them from taking advantage of long-term, secular growth trends in their industry. Typical deal types include platform build-ups, carve-outs and distressed investments.
At present, JLL’s portfolio holds 15 investments, according to the firm’s website. The most recent platform deal, announced in August, saw JLL join forces with Water Street Healthcare Partners to acquire Thread, a Tustin, California-based virtual research platform that helps modernize clinical studies and registries.
JLL was founded in 1988 by Managing Director Paul Levy, previously a senior investment professional with Michael Milken’s Drexel Burnham Lambert. Levy was responsible for the firm’s restructuring and exchange offer business in New York.
Other senior team members are Managing Directors Daniel Agroskin, Eugene Hahn, Kevin Hammond and Frank Rodriguez.
JLL Partners Fund VII generated a net IRR of 20.4 percent as of June 2018, according to TorreyCove Capital Partners data cited in the New Jersey report. For the same period, Fund VI generated a net IRR of 23.2 percent, the report shows.
Action item: See JLL Partners’ ADV filings here.