Mesirow targets combined $1.4bn for fund and co-investments

The manager is out with its latest flagship fund of funds and adjoining co-investment fund.

Mesirow Financial Services wants to raise a combined $1.4 billion across two vehicles, including one focused on co-investments.

Information about Mesirow Private Equity Fund IX was compiled from documents from Alameda-Contra Costa Transit District Employees’ Retirement System and Sewerage & Water Board of New Orleans.

According to Alameda Transit board documents, Mesirow has set a $900 million target for its ninth flagship fund of funds. It has raised $500 million to date and is expected to close in Q4 2024.

Mesirow expects Fund IX will invest between 50 percent and 65 percent of its capital in buyout managers, 20 percent and 25 percent to growth equity and venture capital funds and between 15 percent and 20 percent to special situations managers, according to Alameda Transit documents.

Recent Performance Data

  • Fund VIII (2020 vintage) Net IRR 0.5%; Net TVPI 1.04x; Net DPI N/A
  • Fund VII (2018 vintage) Net IRR 18.2%; Net TVPI 1.66x; Net DPI 0.09x
  • Fund VI (2013 vintage) Net IRR 21.04%; Net TVPI 2.63x; DPI 1.33x
  • Fund V (2011 vintage) Net IRR 16.3%; Net TVPI 2.44x; Net DPI 1.85x

Source: Buyouts data as of June 30, 2023, citing various public pension systems. Subscribers can view here.

Fund IX will also acquire secondary interests and co-investment opportunities, according to Alameda Transit.

Up to 80 percent of Fund IX’s capital will head to North American managers, according to Alameda Transit.

The preferred return is 8 percent, according to board documents. Mesirow will charge no carried interest for its primary commitments in Fund IX.

According to Alameda Transit, the manager set a 10 percent carry rate for secondary investments and a 10 percent carried interest rate for co-investments, which gets bumped to 15 percent after achieving a 2x gross multiple on investment capital.

Mesirow will commit 1 percent to Fund IX, according to Alameda Transit.

Mesirow’s co-investment fund

Mesirow is looking to raise $500 million for its ninth co-investment fund, according to board documents from City of Quincy Retirement System.

Mesirow is charging a 0.82 percent annual management fee. The preferred return rate is 8 percent, board documents said.

According to Quincy, the co-investment fund has a 10 percent carried interest rate that increases to 15 percent after the fund achieves a 2.25x gross multiple on invested capital.

Mesirow anticipates it will invest between 20 and 30 companies in the co-investment vehicle alongside GPs with which it has an existing relationship, board documents said.

The co-investment fund will largely focus on partnerships with mid-market buyout managers but will also have exposure to growth equity and late-stage venture opportunities, Quincy’s documents said.

Mesirow did not return a request seeking comment.