Mid-market buyout shop Beekman rolls out Fund V with $550m target

The Beekman Group, led by former Onex executive John Troiano, is looking to raise $550 million for a fifth flagship buyout offering.

The target for Beekman Investment Partners V was disclosed in materials published by Arkansas Teacher Retirement System. The hard-cap, as yet undetermined, is not expected to be “significantly higher than the target.”

Fund V’s first close, held in August, secured $125 million, ATRS documents said. Further closes this month and in January are likely to add up to $300 million, with a final close anticipated in next year’s first half. Sparring Partners Capital is the placement agent.

Beekman was co-founded in 2004 by CEO and managing partner Troiano, who was with Onex for eight years, eventually becoming a partner and managing director of the Canadian GP’s New York office. Earlier, he worked at Gleacher & Co, an M&A boutique.

Managing director Andrew Marolda, an ex-senior operator at Fortune 500 companies like American Express, helped Troiano launch Beekman. Other managing directors are Andrew Brown and James Clippard, both previously with Prospect Capital Management.

Beekman’s strategy is to make control-oriented investments in North American mid-market companies, typically with revenue of $10 million to $300 million. Lower mid-market opportunities are especially compelling today, the firm notes on its website, as “there are fewer capital alternatives” available to them.

In a subdued deal environment, mid-market buyouts are drawing more attention, in part because they often have attractive entry valuations and are easier to finance than large caps. Of LPs responding to Coller Capital’s Global Private Equity Barometer: Summer 2023, 82 percent said the space should offer good opportunities to GPs over the next two years.

Beekman’s mid-market targets are well-run and have defensible positions, sustainable cashflows and high returns on capital. They are also in service-related sectors, such as business, consumer and healthcare services. Checks of $20 million to $150 million are written for MBOs, recaps, consolidation platforms, growth investments, carveouts, special situations and other deal types.

Beekman reports completing more than 200 transactions since inception. Its most recent deals include recaps of GED, an automation equipment provider to the window-and-door manufacturing industries, and Eclipse Fitness, a Planet Fitness franchisee.

In addition, Beekman has been exiting portfolio assets. In October, it announced the sale of ActivePro, an outpatient physical and occupational therapy provider, to PT Solutions Physical Therapy. And earlier this year, it announced the sale of Mesmerize, a point-of-care media platform for patient education and consumer engagement, to MJH Life Sciences.

Beekman Investment Partners IV raised $425 million in 2018. It was earning a 1.9x gross ROI and a 45.6 percent gross IRR as of June, ATRS documents said. Fund III, closed in 2015 at $230 million, was generating a 2.2x gross ROI and a 19 percent gross IRR.

Beekman did not respond to a request for comment on this story.