Long-term PE pioneer Altas to close third pool on $4bn

Altas Partners, which builds flexibility into its funds for longer holds than traditional PE funds, reached final close on its third fund at its $4 billion target, sources told Buyouts.

Altas has been raising through the deteriorating fundraising markets, though it had amassed the bulk of Altas Partners Holdings III by last fall. Long-term flexibility has not been widely embraced yet in fund structures, though more GPs are exploring ways to expand holds over certain assets through secondaries structures.

Other firms that have created such structures include KKR – through its Core series of funds, including its $16 billion second fund – and Carlyle Group, BlackRock, Blackstone and Cove Hill Partners.

The pool is expected to hold a final close this week, sources said. PJT Park Hill worked as placement agent on the fundraising.

Altas employs a discerning strategy in choosing its investments, with the expectation that it will make around one or two investments a year. It invests from $400 million to $1 billion in each business.

The firm announced earlier this month it would invest $1 billion in Mercer Advisors – the firm’s first investment in two years, one of the sources said. Altas will join Genstar Capital and Oak Hill Partners as an investor in the company.

The Mercer investment, expected to close in the next few months, will be the first investment out of Fund III, one of the sources said.

Andrew Sheiner, CEO and managing partner, formed Altas in 2012 after working at Onex. The firm started investing deal-by-deal, and eventually closed its inaugural pool on just over $1 billion in 2016. It closed Fund II on $3 billion in 2019.

Sheiner leads the firm along with managing partners Scott Werry and Christopher McElhone, along with chair Kathleen Taylor.

“Great businesses are hard to buy,” Sheiner told Buyouts a year after establishing Altas. “If you are fortunate enough to own one, and that business continues to perform strongly, you should be careful about selling it.”

Past investments include Pye-Barker Fire & Safety, a fire protection service provider that the firm invested in 2021; United Women’s Healthcare; DuBois Chemicals; and HUB International. The firm has had at least three exits, including Capital Vision Services, NSC Minerals and Medforth Global Healthcare Education.

While the traditional private equity hold periods, generally three-to-five years, remain widely used, GPs have increasingly looked for ways to extend hold periods over certain investments. This has driven demand in continuation funds, which also provide a way to deliver proceeds back to LPs in older funds. Read more about longer holds here.