Despite losing the full services of two managing partners through succession, MSouth Equity Partners is reportedly having no problem securing the $400 million it has targeted for a mid-market buyout fund earmarked to acquire companies in the Southeast.
Investors have told the Atlanta-based firm, formerly called Cravey Green & Wahlen, that it can expect to raise at least twice the targeted amount, according to sources familiar with the fund.
The news of its fund-raising comes as Managing Partners Richard Cravey and Edwin Wahlen intend to step back into a secondary role at the firm. The remaining team includes Partners Garrison Kitchen, Michael Long and Bart McLean. The partnership recently added former BellSouth Corp. President and COO Mark Feidler to its roster.
The firm declined comment.
The proposed GP commitment to the fund is $10 million. The fund carries a 2% management fee and 20% carried interest after providing an 8% preferred return. MSouth aims to close the fund later this year or in the first quarter of next year, sources said. The firm prefers deals in the range of $25 million to $200 million in total value.
The firm raised $400 million for its most recent fund, CGW Southeast Partners IV, in 1999. Over 14 years, it has had 18 realizations returning 3.1x invested capital and a 30% gross IRR, according to a document circulated to limited partners.
Its portfolio includes Arch Aluminum & Glass Co., maker of architectural glass and aluminium products; Document Technologies Inc., a document management services provider; and The Flexitallic Group, a maker of industrial gaskets.
MSouth has racked up some notable exits under its belt of late. The firm generated a 121.6% gross IRR on portfolio company TruckPro, and a 10.2x multiple of cost on the 2006 sale of Vectorply.
Along with the successful liquidations, the firm has had a couple of investments that yielded no value, according to the LP document. These include the $11.4 million 1995 investment in Monarch Tile; the $7.8 million 1996 investment in Gibson-Homans; and the $26.7 million 1998 purchase of Carpets International.
MSouth has one portfolio company in its newest fund, an environmental services company, though no further details were available.