McCarthy Capital seeks $425m for seventh fund

Nebraska Investment Council committed $50m to the fund.

McCarthy Capital, co-founded by former HDR Inc. executive Mike McCarthy, has kicked off fundraising for its seventh fund, which is aiming to be the largest in the company’s 34-year history.

The Omaha firm is targeting $425 million for McCarthy Capital VII, an SEC Form D document show. The fund focuses on financial services, consumer goods, business services and TMT sectors in North America.

Founded in 1986 by McCarthy and Richard Jarvis, the firm invests in low- to mid-market companies that have an enterprise value between $25 million to $250 million, according to a presentation document from Nebraska Investment Council’s recent board meeting.

The company makes investments between $20 million and $50 million, according to meeting documents. It’s unclear what range Fund VII is targeting.

McCarthy Capital did not respond to requests for comment.

The firm’s previous fund, Fund VI, is 85 percent committed and is performing strongly, the firm said in meeting notes. Fund VI closed in 2016 at $353 million, McCarthy’s largest to date, according to data from Buyouts and Private Equity International.

According to a Form D filing, an associated/broker was not used on Fund VII. The firm used Lazard Freres & Co as a broker for its previous fund, SEC docs showed.

The Nebraska Investment Council committed $50 million to McCarthy Capital VII at its July meeting, the system’s state investment officer, Michael Walden-Newman, told Buyouts in an email.

During the investment period, there is an annual 2 percent management fee on committed capital and 2 percent on invested capital following that period, according to a McCarthy staff memo. The fund has a preferred rate of 8 percent.

Nebraska is the fund’s first commitment since its launch in December.

The pension had previously invested $40 million to McCarthy Capital VI in 2016.

Action Item: Check out McCarthy’s presentation documents from the Nebraska meeting here.