In the coming weeks, Milestone Partners intends to hold a third close on its third buyout fund. The firm had previously raised $143 million in commitments from new and returning limited partners for Milestone Partners III.
The third close will bring the firm’s fund-raising efforts “very close” to its $200 million goal, says a source familiar with the effort. The Saints David, Penn.-based lower mid-market firm raised $120 million for its second fund, which closed in 2004.
The Pennsylvania Public School Employees’ Retirement System and funds of funds manager Parish Capital Advisors were limited partners in fund II, the firm’s first fund to raise institutional money.
Milestone Partners declined to comment on its latest fund-raising effort.
The firm makes control equity investments of $5 million to $25 million in manufacturing, distribution and service companies with valuations of up to $100 million. W. Scott Warren, a former managing director at mid-market merchant banking firms Philadelphia First Group and Beacon Capital, founded Milestone Partners in 1995.
Milestone Partners has purchased three companies out of the third fund and all three closed in the past month. The firm recapitalized Fatz Café, a Greenville, S.C.-based restaurant chain, in partnership with management. Milestone Partners also purchased Safemark Systems, an Orlando-Fla.-based provider of safes to hotels. Its most recent deal was to purchase Global Connection Inc. of America, a direct marketer of pre-paid home phone services to low-income people. —Erin Griffith
GE, Abu Dhabi partner for $8B fund
General Electric Co. (GE) and the Abu Dhabi-based investment agency Mubadala Development Co. announced last week they have entered into an $8 billion joint venture with an initial focus on providing commercial finance in the Middle East and Africa.
The two companies also plan to work together in the clean energy and water, aviation, and oil and gas sectors, they said.
The companies plan to invest about $40 billion over the next 18 months in commercial and infrastructure projects across the region.
The partnership calls for Mubadala to become one of the 10-largest shareholders of the New York-based technology and services conglomerate by acquiring GE shares in the open market. Mubadala currently has no stake in GE.
The companies also aim to establish a clean energy technology center in Masdar City, Abu Dhabi, which aims to be carbon neutral. GE plans to commit up to $50 million for the cleantech center. —Reuters
PAI forms Akkadia
French private equity firm PAI partners announced last week that it has formed Akkadia, a new investment firm that will acquire “significant” minority stakes in listed mid-cap companies. It will be led by Philippe Guez, who previously ran French investment banking operations for Deutsche Bank.
Akkadia will take long-term stakes of between 5% and 20% in European companies. Fund-raising will start later this year and Akkadia will be half-owned by PAI and half-owned by Guez and investment partner Guillaume Moinet. A spokesman said that a fund-raising target had not yet been set.
Minority stake acquisitions by buyout firms are becoming more common as the fallout from the credit crunch makes it tough to raise debt for large acquisitions. CVC Capital Partners last month bought a minority stake in German conglomerate Evonik.
Taking smaller stakes is also an option for private equity firms looking to circumvent rivals and secure influence over the boards of companies on the brink of distress. TPG recently agreed to take a 23% stake in troubled British lender Bradford & Bingley before backing out of the deal. —Reuters
Accretive closes debut secondary fund
Accretive Exit Capital Partners has closed its first fund with $125 million in capital commitments. The firm, which has offices in Boston and West Palm Beach, Fla., acquires portfolio company stakes from mid-market buyout funds.
Cowen raises $500M
Stamford, Conn.-based Cowen Healthcare Royalty Partners has closed its debut fund with more than $500 million in capital commitments. The group, launched last year, received an anchor commitment from Cowen Group Inc. (Nasdaq: COWN). Other LPs include OMERS Capital Partners, Crestline Management, Nordea, Strategic Investment Group, New York Life Insurance Co. and The Travelers Cos.
The fund was targeted at $350 million.
CD&R pockets nearly $3.3B
Clayton Dubilier & Rice has raised nearly $3.3 billion in capital commitments for its eighth fund, according to a regulatory filing. Its listed target is $7.5 billion, although that likely represents an upper limit.
The New York-based buyout firm raised $4 billion for its previous fund in 2006, and it later added a $550 million co-investment vehicle.
Dominus Capital prepares to raise inaugural fund
Dominus Capital, a New York-based buyout shop, is set to start raising its first fund, which is targeted between $325 million and $350 million, according to Private Equity Insider.
Probitas Partners is serving as placement agent. Dominsu was launched earlier this year by former executives of Quad-C Management, which includes Managing Partner Gary Binning and Partners Robert Haswell and Ashish Rughwani.
Kelso & Co., a New York-based private equity fund, closed its eighth investment fund at $5.1 billion in commitments. The New York-based firm raised $2.1 billion for its seventh fund in 2004.
The firm’s principals are the largest collective investors in the fund, named Kelso Investment Associates VIII. Outside LPs in previous funds have included California State Teachers’ Retirement System, Conversus Capital, Pennsylvania State Employees’ Retirement System and The Travelers Insurance Group, among others.
Kinderhook raising third fund
Kinderhook Industries, a New York-based buyout shop focused on the middle-markets, is raising up to $400 million for its third fund, according to a regulatory filing. The firm raised just under $150 million for its second fund in 2006.