Surpassing its target by $150 million, Boston-based Parthenon Capital plans to hold a final close later this month for its second fund, which is expected to notch $750 million. In anticipation of the fund close and the deal-making that will ensue, the group has also recently added eight professionals to its staff, three of whom are partners.
Parthenon Capital, founded by Earnest Jacquet and John Rutherford in 1998, launched Fund II with a target of $600 million last summer. It held a first close on $500 million in the fourth quarter and is now forming the short list of investors that will be allowed to participate in the second and final close.
New investors with Parthenon include Delta Airlines, University of North Carolina, University of Washington and the Sloan Foundation. Previous investors that have re-upped for Fund II include General Motors, State of Oregon, General Mills, Duke University and University of Chicago.
Explaining the fund?s oversubscribed state, Jacquet said investors call Parthenon Capital?s business model unique for the middle market.
Parthenon Capital works hand-in-hand with consulting firm The Parthenon Group, which Rutherford co-founded in 1990. Jacquet and Rutherford set up Parthenon Capital to bring pricey consulting services to middle-market companies, and, in return, the partners give a significant part of the carry to the consulting firm.
“We bring a combination of operating skills and strategy consulting to companies that otherwise wouldn?t be able to pay for that level of support,” Jacquet said.
So far out of Fund II, Parthenon has made three investments and currently has two companies under letter of intent, accounting for approximately $100 million.
Bulking up its staff to accommodate for the increase of capital ? Fund I raised $350 million in 1999 ? Parthenon Capial has increased its investment professional total to 24 people.
Four of the eight new people are operating specialists, while the others come from consulting firms and investment banks.
As for the three new partners, Gideon Argov has joined Parthenon Capital as a special limited partner with 13 years of operating experience, most recently with Kollmorgen Corp. and then Bain & Co. John Niels, now operating director, was previously with The Parthenon Group and Bain & Co. Alan Botsford, partner, has 26 years of operating experience, including roles as chief executive of Vectis and Northstar.
The other new additions include Marshall Bartlett as operating associate, Courtney Ermler, Thomas Scriven and William Slocus, who are all associates.
Contact Leslie Green: Leslie.Green@tfn.com