Lovell Minnick Closes Fund II

Firm: Lovell Minnick Partners

Fund: Lovell Minnick Equity Partners II

Size: over $220 million

Target: $200 million

Lovell Minnick Partners has closed on just over $220 million for its second institutional fund.

The firm has been raising Lovell Minnick Equity Partners II since at least March of 2005, when it reported in a regulatory filing it had raised $80 million of its $200 million target. Goldman Sachs and TransAmerican Life Insurance Co. are among those investing in the second fund, which closed on July 31. The new fund is 50% new investors. Capstone Partners served as placement agent and Gibson Dunn & Crutcher offered legal counsel.

Last September, the firm took over control of ALPS Financial Services Inc., the parent company of administration and distribution services outfit ALPS Mutual Fund Services. It has comnpleted three deals out of the fund so far.

Jeff Lovell, co-founder of the firm, said the first fund is posting gross IRRs in the upper 30s and has returned 2x to its investors thus far. That fund, raised in 2000, had $105 million in capital commitments. It just had a large realization with its sale of Assetmark Investment Services in June to GE spin-off Genworth Financial.

Lovell said his pitch to LPs was three-pronged: his firm is specialized, focusing on smaller and middle market financial services firms only, it has posted solid returns and it has continuity in its management team. The only change in the new fund will be upping the size of the equity stake from $20 million on the high end to $40 million, he said. Portfolio companies include investment management boutiques Arrowstreet Capital, Denali Advisors and Shenandoah Asset Management. The firm also owns advisory Atlantic Asset Management and UNX Inc., an electronic trading firm.

Created in 2004 by Lovell and James Minnick, the firm has offices in New York and Los Angeles. The partners built it out of the private equity business of Putnam Lovell Capital Partners and Putnam Lovell NBF Securities, affiliates of the National Bank of Canada.—M.C.