Firm: Odyssey Investment Partners
Fund: Odyssey Investment Partners IV LP
Amount Raised: $1.5 billion
Target: $1 billion
Hard Cap: $1.5 billion
Placement Agent: Credit Suisse Securities LLC
The $1.5 billion close of
In a market where limited partners are leery of substantial increases to fund size and many general partners have been hunting down commitments for more than a year, mid-market firm
Even more impressive, the target for Fund IV was $1 billion but investor demand ended up exceeding the vehicle’s $1.5 billion hard cap, Stephen Berger, chairman of Odyssey Investment, told Buyouts.
The larger fund will allow Odyssey Investment, which has offices in New York and Los Angeles, to take bigger stakes in its own deals. When the firm was investing from its $750 million third fund, it often closed larger deals that required an equity co-investment from its larger LPs.
“Even though we were a $750 million fund, we were doing deals like a $1.2 billion fund,” Berger said. “The main difference now is that we’ll be investing more from the core fund with fewer co-investments.”
Berger said that just about all of Fund III’s limited partners re-upped their investment in Fund IV, though he declined to name particular investors. Public meeting minutes, however, disclosed a $30 million commitment from the
A regulatory filing for the fund said Fund IV carried a $10 million minimum investment threshold. Credit Suisse Securities LLC served as placement agent for the fund.
To date, no investments have been made with Fund IV, which will be used to acquire companies with annual EBITDA between $20 million and $80 million.
Odyssey Investment’s third fund made its final platform investment on Dec. 29 with the $119.6 million acquisition of management consulting firm SM&A. Fund III still holds seven of the nine total investments it made, including Wastequip Inc., a maker of waste handling and recycling equipment, and York Insurance Services Group Inc., a third-party provider of administrative services for the insurance industry.
Even though much of Fund III’s capital is still locked up, the fund has made some strong returns. Last May, Odyssey Investment sold Norcross Safety Products LLC, a maker of head-to-toe protective equipment for workers, to Honeywell International Inc. for $1.2 billion. Odyssey Investment had acquired Norcross Safety in the summer of 2005 for $495 million, including the assumption of debt, or about 7.7X its 2004 adjusted EBITDA of $64.4 million, according to an article that appeared in Buyouts at the time.
Berger declined to comment on Norcross Safety’s return figures, noting only that is was a “terrific deal.”
The other Fund III exit was 2007’s sponsor-to-sponsor sale of construction equipment rental company Neff Corp. to