KarpReilly Raises $200M From Four Investors

Firm: KarpReilly LLC

Fund: KarpReilly LP

Target: $250 million

Raised: $200 million

KarpReilly LLC has raised $200 million of the $250 million it is targeting for its debut fund from just four investors, holding a first close in recent weeks, a source has told Buyouts.

The popularity of its founders’ alma mater, Saunders Karp & Megrue, appears to have made fundraising a snap. Led by Allan Karp and Christopher Reilly, the Greenwich, Conn.-based firm kicked off fundraising by approaching six investors. Four of the six, including JPMorgan and Blackrock Inc., made commitments totaling $200 million. Now the firm is marketing to a broader pool of investors to raise the final $50 million, our source said. Calls to the firm weren’t returned.

Karp and Reilly were partners at mid-market buyout firm Saunders Karp & Megrue for years before it was purchased by Apax Partners in 2005. The duo left in late 2006 as Apax Partners was expected to wrap up its Apax Excelsior VII fund. Karp’s co-CEO, John Megrue, remains head of Apax Partners’s U.S. private equity operations.

Karp and Reilly aren’t the first Saunders Karp & Megrue alumni to strike out on their own. In 2007, former partner David Oddi co-founded consumer-focused Goode Partners. Around the same time, Donald Chihak, a Saunders Karp operating partner, co-founded Gridiron Capital, a manufacturing and services firm based in New Canaan, Conn. Parallel Investment Partners was spun out of a joint partnership with Saunders Karp & Megrue in 2006 in connection with the Apax Partners buyout.

KarpReilly writes $10 million to $75 million equity checks to acquire companies in the consumer, health care services, business services, retail, restaurant and building products industries. The firm’s Web site boasts a large swath of companies on which Karp and Reilly hold board seats; the companies were purchased during the duo’s time at Apax Partners.

Since its formation, KarpReilly invested in Slant Inc., a designer of women’s plus-sized apparel, and Tina Turk, a Los Angeles-based apparel designer.