Nautic Partners steps up with $4bn target for Fund XI

Nautic Partners, a low-profile private equity shop with a nearly four-decade history, is back in the market with an 11^th flagship buyout offering.

Nautic Partners XI is seeking $4 billion, Vermont Pension Investment Commission documents said, with a minimum GP commitment of $100 million. A closing is expected to be held in May 2024.

With a $4 billion target, Fund XI is set to bring in $1 billion more than its predecessor, closed in 2021 at $3 billion, and $1.5 billion more than Nautic Partners X’s target.

Two years of slower private equity fundraising mostly stymied an earlier tendency of many GPs to return to the market quickly, typically with larger funds. One result of this was a greater share of vehicles missing targets last year relative to 2022 and 2021, according to Buyouts data.

Nautic traces its roots back to Fleet Equity Partners, begun in 1986 as an affiliate of Fleet Bank. The new manager spun out in 2000 with several ex-Fleet professionals at the helm, including current managing directors Habib Gorgi (Nautic’s founder), Bernie Buonanno and Scott Hilinski.

Today, Nautic is led by six managing directors, Vermont documents said. It is principally owned by Chris Corey (who joined in 2008 from JH Whitney & Co), Chris Crosby (who joined in 2001 from McCown De Leeuw & Co) and Hilinski, the firm’s ADV filings said.

Nautic’s mid-market strategy appears to be broadly unchanged over time. It makes control investments of $50 million-$400 million-plus in growth, consolidation and buyout deals involving North American companies with $10 million-$50 million of EBITDA and $100 million-$1 billion-plus of enterprise value.

Targets operate across three core sectors: healthcare, industrials and outsourced services. Nautic looks for opportunities in attractive sub-sectors that can be improved operationally and through acquisitions, where a business is not fully optimized, and where it believes additional value can be unlocked, Vermont documents said.

Going back as far as Fleet Bank, Nautic’s team has completed more than 150 platform acquisitions, the firm reports. It also reports exiting 123 portfolio companies as of December 2021. At present, the portfolio holds 30 active investments.

Two new platforms were announced in February: Angels of Care, a pediatric home health services provider, and SurfacePrep, a distributor of surface enhancement products. Angels of Care was acquired from Varsity Healthcare Partners, and Surface Prep, from CenterOak Partners.

Last year’s deals include the take-private acquisition of Nasdaq-listed Tabula Rasa HealthCare, valuing it at $570 million, including debt. Tabula Rasa was merged with ExactCare, creating a pharmacy care management business.

Nautic Partners X was earning a 1.1x net multiple as of June 2023, according to Texas County and District Retirement System. Nautic Partners IX was earning a 1.54x net multiple and a 26.65 percent net IRR.

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