If private equity firms are concerned about limited partners being stretched too thinly for capital commitments to their funds, then they’re definitely not showing it.
Madison Dearborn Partners‘ Madison Dearborn Capital Partners IV, which had an initial target of $3.5 billion, reportedly received a $200 million commitment from the New York State Common Retirement Fund.
David Mosher, a managing director at Madison Dearborn, declined to comment on the fund’s LP allocations or the list of LPs that participated in the firm’s latest offering. However, he did confirm that the fund held a final close this month on approximately $4 billion. Madison Dearborn began marketing its latest fund, with a target of $3.5 billion, last September and held an initial close in November on $1.7 billion.
Although the fund-raising market was super saturated with large buyout groups all seemingly tapping their LPs at the same time, Mosher said the firm did not hit any speed bumps in raising its latest vehicle. “Clearly the market was changing as we were out there but we had terrific support from our existing limited partners and a high degree of interest from new investors as well. So we were quite grateful from the response that we received,” he said. The fund will target a 30% internal return rate for its investors, added Mosher.
Fund IV will focus on investing in the manufacturing and communications industries, said Mosher. “Half of our business is buyouts and the other half is growth equity investments, particularly early-stage investments in the communications industry. We were one of the first institutional investors in Nextel Communications as well as early investors in Omnipoint. Other industries we focus on since the early 1980s include health care and financial services.”
Mosher also mentioned that Madison Dearborn has fully committed its most recent fund, Madison Dearborn Capital Partners III LP, which raised $2.22 billion in 1999.