PE fund briefs, week of Nov. 10, 2008

Northstar Capital closes latest mezz effort at $515M

Northstar Capital, a Minneapolis, Minn., middle-market firm that invests primarily in senior and subordinated debt, has held a final close on its latest mezzanine debt fund, finishing with $515 million in capital commitments.

The fund-raising effort for Northstar Mezzanine Partners V took about a year, according to Scott Becker, managing partner. The target for the fund was $350 million with a $450 million hard cap.

“The process went fairly smooth,” said Becker. “We’ve found there’s a niche of institutional investors in the United States and Europe with an appetite for a pure-play mezz fund.”

Roughly a third of the money came from insurance companies, a third from pension funds and the remaining third from a mix of European funds of funds, foundations and endowments, Becker said. The size of the latest fund represents a fairly large step-up from Northstar Mezzanine Partners IV, which closed in 2005 with about $303 million in capital commitments. Douglas Mark, also a managing partner, said the increase is fitting given how the credit crunch has deepened over the past few months.

The firm’s typical investment ranges from $5 million to $30 million. It looks to hold investments between five and eight years. Northstar takes a generalist industry approach, although it does have some special interest in value-added distribution, light manufacturing, business services, financial services, education and specialty health care, according to its website. —Michael Baron

Asia Alternatives raises $950M for second FoF

Asia Alternatives Capital Partners has closed its second fund of funds with $950 million in capital commitments, exceeding its target of $850 million and nearly reaching its hard cap of $1 billion.

“Over 70% of fund II commitments came from U.S. LPs,” says Melissa Ma, co-founder and managing director of the firm.

Asia Alternatives Capital Partners II, established in October 2007, received pledges from the California Public Employees’ Retirement System, Conversus Capital, New York State Common Retirement Fund, OHIM Asia Investors (an affiliate of Oak Hill Investment Management), Ontario Municipal Employees Retirement System and the Pennsylvania State Employees’ Retirement System.

Most of the capital raised for fund II came from supporters of the preceding fund, which closed in mid-2007 with $515 million.

Asia Alternatives Capital Partners invests in fund managers in Mainland China, Taiwan, Hong Kong, Japan, Korea and India. Southeast Asia, Australia and New Zealand will also be considered. The Hong Kong-based firm, with offices in San Francisco and Beijing, was founded in 2006 by Ma, formerly a director at Hellman & Friedman; Laure Wang, previously a general partner of Pacific Venture Partners; and Rebecca Xu, formerly a senior investment officer at the International Finance Corp., which is part of the World Bank. —Nancy Gordon

Lincolnshire doubles fund size

Lincolnshire Management, a New York-based middle market buyout shop, has blown its target out of the water on fund-raising for Lincolnshire Equity Fund IV.

The firm has raised $835 million, according to a regulatory filing, which does not indicate the fund has closed. The initial target, according to a filing from May 2008, was just $600 million.

Lincolnshire Management’s previous fund closed in 2005 with $433 million in commitments. By doubling its fund size, the firm, led by CEO T.J. Maloney, has put itself into the realm of the upper-middle market.

Recent exits from the firm include Excelsior Radio Networks Inc., which the firm sold last year to Triton Media Group, a digital products and services supplier and a portfolio company of Oaktree Capital Management. The deal was reportedly valued at more than $100 million, and Lincolnshire remains a minority stakeholder in the company. —Erin GriffithCarlyle raises Europe tech fundThe Carlyle Group reportedly has raised $673 million for its second fund for small-cap and mid-cap buyouts of European technology companies, according to a report in The Financial Times. The Carlyle Group could not be immediately reached for comment by Reuters.

The fund, Carlyle Europe Technology Partners II, seeks to acquire European technology companies worth between $25 million and $255 million, and which focus on Carlyle’s preferred sectors of aerospace, media, telecommunications, industry and financial services.

Private equity firms have been hamstrung this year by the near shutdown of credit markets and as liquidity has dried up in many banking systems around the world.

“But the part of the private equity market that gets reported most is the large end, where little is happening at the moment, due to the credit crunch,” the Financial Times quoted David Fitzgerald, managing director of Carlyle Europe Technology Partners, as saying. “At our end of the market, deals are still happening, and interestingly we can still raise debt to fund transactions.”

The new fund is more than twice the size of its predecessor, Carlyle Technology Partners I, a $273 million fund raised in 2006, which is now almost fully invested, the paper said. —Reuters

China Construction Bank launches health care fund

The investment banking arm of China Construction Bank plans to launch a $731.3 million fund to focus on investments in the country’s growing heath care sector.

Once launched, the fund would focus on investments in health care-related sectors, including pharmacy, medical equipment manufacturing, medical institutions and services.

The fund, to be called China Healthcare Investment Fund, would be the first domestic investment fund specializing in investments in China’s heath care industry, according to state run news media outlet Xinhua News Agency.

China’s economic boom has resulted in stark health inequity between its urban and rural populations, and health experts have urged the Chinese government to work harder at improving health care options for China’s rural population. —Reuters

Vista Equity raises $1.3B

Vista Equity Partners has closed its third fund with $1.3 billion in capital commitments. The San Francisco-based firm focuses on mid-market opportunities in the enterprise software market.

Vist Equity also raised $1.3 billion for its previous fund, which closed in 2004.