JLL To Seek $2.5B For Complex Deals, Build-ups

Firm: JLL Partners

Fund: JLL Partners VI LP

Target: $2.5 billion

Placement Agent: Credit Suisse

Legal Adviser: Skadden Arps Slate Meagher & Flom LLP

With its vintage-2005 fund past the 75 percent depletion point and strong exits to tout, New York buyout shop JLL Partners is gearing up to raise twice as much money with its newest vehicle.

The firm, which specializes in complex situations and build-ups, plans this month to send out a PPM with $2.5 billion on the cover for JLL Partners VI LP. The firm has already gotten soft circles from prior investors for $1.5 billion, equivalent to the size of its vintage-2005 fund, and Fund VI could reach $3 billion, according to a source familiar with the firm’s effort.

Among its backers, the firm counts several savvy limited partners—including Colorado Public Employees’ Retirement Association and Harvard University. Most, if not all prior LPs are expected to re-up, though to double the size of its fund JLL Partners is expected to invite in new LPs as well, according to our source.

Its portfolio companies operate in a handful of industry sectors, including health care and financial services. JLL Partners typically buys companies in need of financial restructuring or improvement. Taken together, the 14 companies in the firm’s portfolio have an average of 4x EBITDA leverage, which is low compared with peers, according to our source.

JLL Partners has scored solid exits from Fund V. Its 2005 investment in J.G. Wentworth, a structured settlement broker, has already returned more than 2x invested capital through two dividend recaps. The firm’s stake in J.G. Wentworth is valued at 6.1x following an equity float over the summer on a Bear Stearns private trading platform, which saw about a dozen institutional investors buy pieces of the company.

JLL Partners also notched a 2.9x return on the sale of Mosaic Sales Solutions earlier this year, and it recouped half of its $100 million investment in health care company Iasis through a dividend recap in May. Those deals benefited Fund IV.—J.H.