New York teachers’ pension commits $25 mln to CapStreet IV

  • It is a new relationship for the pension system 
  • Houston-based firm focuses on lower-middle-market deals
  • Has led or co-led investments in 35 companies since 1990

In its first commitment to a CapStreet Group fund, the New York State Teachers’ Retirement System OK’d the commitment on February 28, marking the limited partner’s second recent move into alternative investments. On March 10, the retirement system pledged $25 million each to two venture-oriented funds from Lightspeed Venture Partners: Lightspeed Venture Partners X and Lightspeed Venture Partners Select.

Earlier this year, the system also committed $100 million to buyout-focused GTCR Fund XI from GTCR, $100 million to CVC Capital Partners Asia Pacific IV from CVC Capital Partners and $125 million to Energy Capital Partners III from Energy Capital Partners.

The CapStreet Group LLC disclosed about $250 million in commitments to CapStreet IV LP in a Form D filing in January. The firm is running ahead of the $178 million raised for CapStreet III LP, which closed in 2010.

Co-founded in 1990 by Chairman George  Kelly, CapStreet Group typically makes control investments in companies with enterprise values of less than $150 million, according to its website.

Among its recent deals, CapStreet Group in September completed a majority recapitalization of Houston-based Industrial Plant Services Inc, for an undisclosed sum. The firm wrapped up the majority recapitalization of T.F. Hudgins Inc, an industrial components maker, in February 2013. And in 2012, CapStreet Group refinanced Gulf Stream Marine, a marine cargo handling company in the U.S. Gulf Coast region.

Since its founding, Houston-based CapStreet Group has led or co-led investments in 35 portfolio companies, which in turn have completed more than 250 add-on acquisitions. An executive there did not return an email from Buyouts for comment.