Madison Dearborn Partners has enlisted Credit Suisse’s private placement group to help raise its sixth fund, according to a source with knowledge of the firm.
The Chicago-based LBO firm did not use a placement agent in the U.S. for its last fund, but it did employ U.K.-based Helix Associates to drum up foreign capital. At $12 billion, Madison Dearborn Capital Partners VI LP would be almost double the size of the firm’s previous vehicle, the $6.5 billion Madison Dearborn Capital Partners V LP that closed in 2006. Such a fund would put the firm in the same league as powerhouses Bain Capital, currently raising both a $10 billion fund and a $5 billion co-investment vehicle, and Providence Equity Partners, which closed on a $12 billion fund this year.
It’s a quick return to market for a firm that historically has taken its time deploying capital. Prior to Fund V, which closed in 2006, Madison Dearborn had not raised a vehicle since the $4 billion Madison Dearborn Capital Partners IV LP that closed in 2000. That fund came one year after the $2.2 billion Fund III raised in 1999, but the vintage before that was 1996, when the firm closed on $925 million.
Madison Dearborn has ramped up its acquisition pace during the last year, doing more deals and spending much more on them. In May, Madison Dearborn consummated the largest deal in its history when it acquired CDW Corp., a computer vendor, in a take-private transaction valued around $7.3 billion. A month later it announced the $5.7 billion acquisition of Nuveen Investments, a money management firm.
Madison Dearborn’s funds have grown steadily in size over the years, beginning with the $550 million Madison Dearborn Capital Partners LP raised in 1992. The shop specializes in the communications, consumer goods, financial services and health care industries. Ruth’s Chris Steak House Inc., XM Satellite Radio Holdings Inc. and The Yankee Candle Company Inc. are among its portfolio companies.
Credit Suisse’s private placement group has raised funds for general partners such as LS Power, The Jordan Co., and Lee Equity Partners. We were unable to reach executives at Credit Suisse or Madison Dearborn for comment.—J.P.