PE fund briefs, week of Jan. 18, 2010

Blackstone raises about $9B so far


Blackstone Group has raised about $9 billion so far for its sixth global buyout fund and is aiming to complete fund-raising at the end of June, it told investors in a recent letter.

Blackstone began raising the fund, BCP VI, about two years ago.

Details of the letter were disclosed to Reuters by a source who has read the document. Blackstone declined comment.

The last two years has become an increasingly tough period to ask investors for cash. Pension and endowment investors, which took a large hit on their equity portfolios during the financial turmoil, have been unwilling to commit fresh capital. Recent research from London-based firm Preqin said private equity fund-raising slumped to its lowest level in five years in 2009.

Blackstone did not publicly disclose a target when it started raising the fund, although the target was reportedly set at $20 billion when fund-raising began in October 2007.

Blackstone has more recently said it aimed to raise a number in the low to mid teens.

The firm has a vast amount of dry powder from previous funds raised. It said in November it has $27 billion of dry powder, the lion’s share of which is in its real estate and private equity funds. —Megan Davies, Reuters

Roark Capital cools to financial services, cuts DeAngelo

Buyout firm Roark Capital will no longer make financial services investments, a decision which leaves Partner Larry DeAngelo out of a job, according to a source familiar with the situation. DeAngelo joined the Atlanta-based firm in 2005 to lead its financial services investments.

His tenure at Roark officially ended on Dec. 31.

Roark Capital declined to comment and DeAngelo did not respond to inquiries.

The firm’s decision to move away from financial services happened gradually. When its most recent fund closed in 2008, the firm intended to invest much of the $1 billion in capital into its two core areas of focus: franchising and environmental services. The firm also planned investments in financial services, direct marketing and business services, three areas led by DeAngelo. However, the firm hasn’t found adequate opportunities in financial services, the source said, leading Roark Capital to drop its focus on that area. The firm will continue to look at direct marketing and business services deals. In recent years, Roark Capital brought in Ezra Field to lead the firm’s efforts in direct marketing and promoted Anthony Scotto to managing director to oversee the firm’s efforts in business services.

The firm hasn’t done a financial services deal with its current fund. Its last five deals have been in the franchising industry. In the fourth quarter of 2009, Roark Capital invested $100 million in equity into non-hazardous solid waste management company Waste Pro USA. The company also acquired Pet Valu, a Canadian pet food and supply retailer and distributor. Roark’s $1 billion fund is 30% deployed, the source said.

3i seeks $1.6B growth fund

Private equity firm 3i Group Plc is planning to raise a $1.6 billion fund to buy minority stakes in small businesses in a return to its investment roots, the Sunday Times newspaper reported. The paper, without citing sources, said 3i was talking to third-party investors to drum up interest.

3i was not available for comment.

A specialist in early stage investment, 3i branched out in recent years into bigger buyout deals, but these have been hit hard by the drying up of lending in the economic downturn. —Mark Potter, Reuters

Greyrock Capital closes second mezz fund

Greyrock Capital Group has closed its second mezzanine and junior capital fund with $122 million in capital commitments.

The Westport, Conn.-based firm raised $190 million for its debut fund, which closed in 2004. Greyrock’s second fund has already closed four transactions with total commitments of $31 million.

Group raising $200M cleantech fund

The Global Environment Fund and India’s Yes Bank are raising a $200 million private equity fund to invest in cleantech companies, according to the Financial Chronicle. The two groups previously planned to raise up to $500 million, but scaled back those plans. A final close is expected later this month, with LPs to include the International Monetary Fund and the Asian Development Bank.

Persistence Capital continues with debut fund

Persistence Capital Partners, a Montreal-based health care services investor, has held a second close of about $63 million on its debut fund. The firm says that it expects to hold a final close at the end of the quarter, but did not disclose the target.

The fund aims to acquire platform companies in the Canadian health care services industry and will not invest in biotechnology, pharmaceutical discovery or medical devices.