PE fund briefs, week of Jan. 11, 2010

CD&R raises $5B for eighth fund

Clayton Dubilier & Rice has closed its eighth fund with $5 billion in capital commitments, according to a source familiar with the situation. An announcement is expected shortly.

The New York-based firm began fund-raising almost two years ago with a listed hard cap of $7.5 billion, after having raised $4 billion for its seventh fund in 2006.

CD&R is not a middle-market player, but isn’t quite considered a mega-firm, either, despite the $5 billion fund size. Typically, the firm does just one deal a year, although last year CD&R closed three deals, all paid for by its new fund.

Its most recent deal was announced just before Christmas, when CD&R acquired BCA, a U.K.-based seller of autos from corporate lessees and rental businesses to used car dealers. The deal value was not disclosed, but a source familiar with the deal said CD&R paid more than $500 million for the company (including about a 55% equity check). The firm used eight banks to finance the transaction.

CD&R Partner Dave Novak said that the firm is particularly interested in BCA’s online business, which has shown double digit growth in the past year.

In October, CD&R made a $250 million equity investment in NCI Building Systems, a maker of metal products for nonresidential buildings. That same month, the firm invested $477 million for get a 46% stake in commercial cleaning company JohnsonDiversey.

The firm’s fifth fund, a 1995 vintage, earned a 1.03x return; its sixth fund, a 1998 vintage, has earned a 1.43x return, according to data from Washington State Investment Board. —Erin Griffith

Riverside closes oversubscribed fund with $406M

Sometimes all you need is a little momentum. That’s one way Riverside Partners pulled off one of the most successful fund-raising drives of the year.

When the Boston-based firm entered the market with its fourth fund in March, it was prepared for the worst. But with the help of placement agent Atlantic Pacific Capital, the health care-focused buyout firm last week closed at its hard cap of $400 million in just under eight months.

Riverside Fund IV closed with $406 million in commitments, which included $6 million in GP commitments. The firm’s prior fund, a 2005 vintage, had $225 million in commitments.

General Partner David Belluck said that fund-raising was helped by the firm reaching out to a broader set of investors, including public pension funds and European LPs its university endowments and foundations. Yale University and MIT were among the firm’s lead investors.

Belluck said that the prior fund is fully invested and that the firm has used fund IV for its investment in July in Vocollect, a voice-assisted work system provider. —Erin Griffith

Monomoy Capital back in fund-raising mode

Monomoy Capital Partners is raising $250 million for its second turnaround vehicle focused on the smaller end of the middle market.

The New York-based firm was formed in early 2005, when four investors with turnaround giant KPS Capital Partners left to hang their own shingle. “There’s just not as much capital chasing the small-middle market. We saw an opportunity and decided to pursue it,” co-founder Stephen Presser said at the time.

Presser also said that Monomoy would not compete with KPS, but that a “more likely scenario is that we would work with [KPS] where our interests overlap.”

Monomoy raised about $280 million for its debut fund, after it targeted just $200 million and received more than $400 million in interest. PE Week affiliate publication Buyouts reported in April that the first fund was two-thirds committed, and that marketing already had begun for fund II.

Monomoy did not return requests for comment.

MVision Private Equity Advisors is serving as placement agent. —Dan Primack

Cressey creeps toward lowered target

After two years in the market, buyout firm Cressey & Co. has gathered just over $300 million in commitments toward its first fund since spinning off from Thoma Cressey Bravo in 2007.

The effort had an initial target of $500 million, but the firm has since lowered that figure to about $400 million. Cressey plans a final close in the first half of 2010, with Park Hill and Shannon Advisors serving as the fund’s placement agents.Partner Bryan Cressey did not return a call for comment. —Erin Griffith

Staley Capital expects first close in Q1

Staley Capital, a growth equity firm focused on business services investments, is expected to hold a first close in the first quarter, according to a source familiar with the situation.

Renny Smith, a former pro with THL Partners, launched the firm in the fall with a $100 million target. While at THL Partners, Smith launched the firm’s venture arm, TH Lee Putnam Ventures, in 1999.

Staley Capital has made one investment to date through a special purpose vehicle, investing an undisclosed amount into Chicago-based marketing agency Aspen Marketing Services.

Staley Capital’s team includes Jay Crystal, formerly an associate with American Capital; Snantanu Dhaka, a former Jefferies analyst; and special partner Ramanan Raghavendran, formerly of TH Lee Putnam Ventures and Insight Venture Partners. —Erin Griffith

Parish raising two FoFs

Parish Capital has held first closes on two new funds-of-funds: Parish Capital III, a North American fund with a $450 million target; and Parish Europe II, a Europe-focused fund with a $360 million target. The firm announced the closings last month, but without disclosing how much had been raised.

But Parish Capital III has secured $73 million and Parish Europe II has secured $73 million, according to regulatory filings. The filings also indicate that the North American fund has a $600 million cap, and the European fund has a cap of approximately $502 million.