Longroad Driving Toward Goal For Fund III

Firm: Longroad Asset Management

Fund: Longroad Capital Partners III LP

Target: $400 million

Amount Raised So Far: more than $200 million

Connecticut-based Longroad Asset Management is more than half way to its $400 million target for turnaround fund Longroad Capital Partners III LP, having raised more than $200 million so far, according to reports.

The firm invests in distressed situations where it can achieve effective control over the governance of lower-mid-market companies in the United States and Canada, where it also has an office. The shop launched fundraising for the vehicle in the summer of 2008.

Fund III is earmarked to acquire debt securities, obligations and assets of distressed companies. According to the August minutes of the Nebraska Investment Council, the firm had hoped to hit a final close by October 2009. Nebraska pledged $20 million to the fund on the recommendation of consultant Ennis Knupp.

The firm seeks controlling stakes in companies generating revenues of $50 million to $500 million and that are distressed due to overleveraged balance sheets, a lack of liquidity, poor cost controls or external shocks. Late last year, Longroad Asset Management acquired Medford, Wis.-based Hurd Windows & Doors Inc. out of bankruptcy. The firm paid $11.25 million and bought $14 million in bank debt held by the residential window and door maker.

Paul Coughlin III founded Longroad Asset Management in 2001. Previously he was a co-founder and general partner of CoMac Partners LP, a distressed investment partnership where he raised and managed more than $400 million. In January 2003, the firm closed its debut fund with $109 million, and in August 2004, it closed its second vehicle with $183 million.

Longroad Asset Management did not return emails seeking comment for this story.