L.A. Shop Passes Halfway Mark For Fund III

Firm: Riordan Lewis & Haden Equity Partners

Fund: what is official name? RLH Investors III LP

Target: $250 million, hard cap of $350 million

Placement Agent: Probitas Partners

Riordan Lewis & Haden Equity Partners, the buyout shop co-founded by former Los Angeles mayor Richard Riordan, recently held a first close on its third fund, a source close to the fundraising effort told Buyouts.

The Los Angeles-based firm has raised $150 million in commitments, more than half of the $250 million target. Investors so far include Altius Associates, a private equity advisory and fund of funds firm; secondary fund investor Montauk TriGuard, and some family offices. Firm executives expect to close the fund, which will raise as much as $350 million if there enough demand, by the end of the year.

RLH Equity, as the firm is popularly known, invests $10 million to $50 million in companies that generate annual revenues of between $20 million and $250 million. Sectors of interest include business services, health care, and government services. In early 2010, the firm also launched an initiative to pursue acquisitions of mid-market companies in the durable goods consumer products sector.

Riordan, who is no longer involved in the daily activities at the firm but remains a significant investor, co-founded the firm in 1982 alongside J. Christopher Lewis, a former employee of Bank of America. Patrick Haden, an attorney, joined the firm in 1987 and was an active partner until last year, when he became athletic director at the University of Southern California, where he was quarterback for the football team in the 1970s (he remains on the board of one of the firm’s companies, an investor in the firm’s funds and an informal advisor). Lewis continues to run the firm with fellow Managing Directors Michel Glouchevitch, Murray Rudin and Robert Zielinski.

RLH Equity closed its previous fund at $265 million in 2007. Lewis declined to comment.