Lovell Minnick Cruises Past Target For Fund III

Lovell Minnick Partners, a buyout shop investing in the financial services sector, has surpassed the target for its third fund and is keeping the fund open, a source familiar with the fundraising told Buyouts.

The El Segundo, Calif.-based shop closed on $365 million of commitments in December, $15 million more than the target previously reported in Buyouts. The firm held a first closing of $220 million for Lovell Minnick Equity Partners III in June.

Credit Suisse is helping the firm raise the fund, which has attracted close to 20 institutional investors, including WP Global Partners Inc. and RCP Advisors LLC.

It is not clear when or at what amount the firm’s managers plan to wrap up the fundraising effort.

Lovell Minnick invests between $10 million and $40 million of equity in financial services companies, and typically holds on to its investments for about five years.

The firm’s success in fundraising perhaps reflects an increasing interest among limited partners in funds that target the troubled financial services sector. The Carlyle Group has reportedly already raised $1 billion toward a $3 billion fund focused on financial assets, and David Rubenstein, the firm’s co-founder, recently told Reuters the buyout shop was actively seeking deals in the sector. JC Flowers & Co. LLC is reportedly seeking $7 billion for its third buyout fund targeting financial services; and turnaround specialist Wilbur Ross, whose firm, WL Ross & Co., recently bought a community bank, reportedly is considering partnering with Carlyle for an investment in BankUnited Financial, a troubled Florida-based bank with $14 billion in assets.

Lovell Minnick made one platform acquisition in 2008, buying Mercer Advisors Inc., a Scottsdale, Ariz.-based provider of financial management services for dental and medical professionals, for an undisclosed amount in May. Also in May, a Lovell Minnick portfolio company, ALPS Fund Services Inc., acquired the assets of Price Meadows Inc., a Bellevue, Wash.-based hedge fund administrator. Lovell Minnick made one investment in 2007, taking a $35 million minority stake in Leerink Swann & Co., a Boston-based boutique investment bank.

The firm’s previous fund, Lovell Minnick Equity Partners II LP, closed in July 2006 with $220 million in commitments. Jeff Lovell, the CEO who founded the firm with James Minnick in 1999, declined comment for this article.