NexPhase Capital, launched three years ago by former principals of Moelis Capital Partners, has set a $400 million target for its second, lower-mid-market fund, according to an SEC filing.
The new vehicle is called NexPhase Capital Fund IV because the same team led prior funds under the Moelis brand. The New York-based private equity firm’s inaugural fund, Fund III, sought $500 million but came short of that goal, closing in 2018 at about $360 million.
Fund III’s limited partners included New York State Common Retirement Fund, which committed $20 million.
NexPhase declined comment on its fundraising activity.
NexPhase, which maintains a strategic relationship with Moelis & Co and Moelis Asset Management, makes control investments in North American healthcare, industrial services, software and consumer sectors. It generally invests up to $75 million in companies with Ebitda of $3 million to $30 million and values of $25 million to $250 million.
NexPhase’s team has backed 28 companies, the firm’s website shows, seven of them since 2016. They include Action Behavior Centers, an Austin-based provider of applied behavior analysis therapy for children with autism, recapped last October. NexPhase is now pursuing a sale of the business, Buyouts reported this month.
Action Behavior is one of several portfolio companies sold or put up for sale by NexPhase this year. Others include Insurance Technologies, a Colorado Springs, Colorado-based provider of insurance and financial services software and sales automation platforms, recently put on the auction block. The company is a Moelis legacy asset backed in 2014.
Inside Real Estate, a Salt Lake City-based provider of marketing software to real estate agents and brokers, was sold last month to Lovell Minnick Partners. NexPhase earned a 5x multiple on a three-year investment, Buyouts reported. The firm also generated 5x its money on the recent $500 million-plus sale of Comprehensive Pharmacy Services to Frazier Healthcare Partners. CPS, a Memphis-based provider of outsourced pharmacy services, is another Moelis holdover investment made in 2012.
NexPhase operates with a team of 17 investment pros led by Managing Partners Kurt Larsen and Ted Yun and Partners Jamie Kaufman, Andy Kieffer, Joel Killion and Lex Leeming, all veterans of Moelis Capital Partners. Larsen was a managing director of Cerberus Capital Management before joining Moelis in 2007, while Yun was a managing partner of West Hill Partners before joining in 2010.
As part of its relationship with Moelis Asset Management, NexPhase advises on $1.2 billion of PE capital.
Action item: See NexPhase Capital’s investment overview here.