Mesirow Has $400M For Fourth FoF

Firm: Mesirow Financial

Fund: Mesirow Financial Private Equity Partnership Fund IV

Target: $750 million

Raised to date: $400 million

Target allocation to LBO funds: 40 percent

Legal Counsel: Proskauer Rose

Mesirow Financial has raised $400 million for its fourth fund of funds.

The fund, called Mesirow Financial Private Equity Partnership Fund IV, has a target of $750 million, and Mesirow Financial has already accumulated $400 million for it. The Chicago-based firm is aiming to have the full amount raised by the end of the year, a source close to the firm told Buyouts.

Limited partners in the fund include Orange County Employees’ Retirement System and Louisiana State Employees’ Retirement System.

About 40 percent of the total will go to LBO firms in the United States. Another 30 percent will go to venture managers. Mesirow Financial expects to commit 15 percent of the fund to special situations groups, which include industry-focused firms such as TSG Consumer Partners, distressed managers such as Sun Capital Partners, and a handful of mezzanine funds. Another 15 percent of the fund is earmarked for non-U.S. funds, and all of the commitments from that bucket have so far gone to pan-European buyout funds, according to our source.

Through early June, Mesirow Financial has used $225 million of the new fund to back 11 general partners, including TSG Consumer Partners and Sun Capital. All of the fund of funds’ investors, regardless of when they commit to Mesirow Financial, will gain exposure to all of the fund’s general partners. At least in light of the 11 commitments already made, “It’s not a blind pool,” our source said. Investors will get access to hot commodities such as Sun Capital Partners VI, the wildly oversubscribed $6 billion vehicle closed earlier this year. Overall, Mesirow aims to back about 40 managers over three and a half years.

Mesirow Financial has its eye trained on several general partners due back on the fundraising market through the first quarter of 2008, by which time the firm expects to have committed $400 million to 20 managers, our source said.

Last year, Mesirow Financial closed two funds, a $150 million co-investment vehicle and the $500 million Mesirow Financial Private Equity Partnership Fund III, which the firm started committing in 2005 and which is now 90 percent committed.—M.C.