Leeds Equity, like several other firms in the hyper-fundraising markets, has boosted its fund size above the $1 billion threshold with its $1.4 billion final close on its seventh flagship pool.
Fund VII closed last week for investments in education and training services, a source with knowledge of the firm told Buyouts.
Leeds raised through the pandemic slowdown last year, taking advantage of its focus on the technological evolution in education and training. Other firms have cashed in on their tech focus as tech evolution in business was accelerated by the move to remote.
UBS worked as placement agent on the Leeds fundraising. Leeds did not respond to a request for comment by press time Monday.
Leeds, formed in 1993 by Jeffrey Leeds and Robert Bernstein, had a hard-cap of $1.25 billion. To raise past a hard-cap usually means a GP has to get permission from LPs. It’s not clear if that was the case in this instance.
Jeffrey Leeds heads the firm as managing partner along with partners Susan Cates, Jacques Galante, Scott VanHoy and CFO Peter Lyons. The firm invests in the education, training and information services industries, which it calls the knowledge industries, according to its Form ADV.
The firm targets companies with total enterprise values between $125 million and $300 million, according to an investment memo from the Connecticut State Treasury. Fund VII will target 10 to 14 portfolio companies, each requiring total equity investments of $80 million to $125 million, the memo said.
In September, the firm invested in Genius SIS, which provides virtual learning software for the education, corporate and government training markets. In May, it invested in engage2learn, which provides professional development coaching and tech tools for school districts in K through 12.
Leeds’ investment committee comprises Jeffrey Leeds, Galante, Lyons and VanHoy. All investment professionals are able to participate in meetings leading up to the investment committee meeting, giving each individual “a voice in addressing the opportunities and risks of each potential investment,” the Form ADV said. Investments must be approved by three of the four investment committee members.
Leeds closed its prior flagship on $750 million in 2018. Fund VI was generating a 20 percent net internal rate of return and a 1.2x multiple as of September 30, 2019, according to performance information from Connecticut treasury.
Connecticut listed the Leeds fund size increase as a potential area of concern if the bigger pool pushed the firm into larger, more competitive investments, or if it proved bigger than manageable for the firm’s resources, according to the investment memo.
However, Connecticut staff said Leeds is expected to keep its focus on the mid-market. The firm has also added resources, including a growth-focused team, expected to provide necessary capacity for the larger fund, the memo said.