PE fund briefs, week of Oct. 6, 2008

Arlington Capital preps third fund

Washington, D.C.-based Arlington Capital Partners, which targets companies in heavily regulated markets, is readying fund-raising materials for its third fund, according to a source familiar with the situation.

No official target has been announced, but limited partners expect a goal in the ballpark of $700 million to $750 million. Arlington Capital Partners I, which closed in 1999, had $452 million in commitments; six years later, the firm raised $585 million for fund II.

Credit Suisse will place the third fund, replacing the prior placement agent, UBS.

Arlington Capital Partners did not return calls for comment. The firm was co-founded in 1999 by Jeffrey Freed and Robert Knibb. —Erin Griffith

Energy firm nears close for fifth fund

Quantum Energy Partners is approaching the $2.75 billion target for its fifth fund. A source familiar with the fund-raising says that the Houston-based shop has so far raised around $2.3 billion.

The fund will be a hefty increase from its fourth fund, a $1.32 billion vehicle raised in 2006.

Quantum Energy launched fund-raising in the spring and held a first close of $2 billion in July. It’s expected to hold a series of closings through the fall. The exact close date has not been determined.

The firm is currently waiting on a few large institutional investors, says the source. Investors who have signed on so far include the Nebraska Investment Council, which committed $20 million, and the New Mexico Public Employees Retirement Association, which committed $35 million, according to published reports.

Champlain Advisors is helping the firm raise the fund.

Quantum Energy cuts checks for $50 million to $500 million for companies primarily in the oil and gas upstream and midstream sectors. It also considers deals in the oil field services and equipment, coal, power generation and transmission, and renewable and alternative energy sectors. It typically holds companies for three to seven years.

Firm officials declined to comment. —Bernard Vaughan

Tenaska Power fund nears close on fund II

Tenaska Capital Management, the buyout arm of Omaha, Neb.-based Tenaska Energy, is set to close fund-raising for its second fund at the end of October, says a source familiar with the situation.

Underlining robust investor interest in the energy sector, commitments for Tenaska Power Fund II are expected to come in no less than the hard cap of $2.5 billion, well above a target of $1.5 billion, the source says.

A spokesperson for Tenaska Capital declined comment on the status of the fund-raising efforts.

Tenaska Capital provides services to the standalone Tenaska Power Fund family, whose debut fund closed in 2003 at $840 million. That fund is fully invested and roughly a third of this second fund is already invested, the source says. Tenaska Energy is a private power-generation company formed in 1987.

The most recent deal for Tenaska Power Fund came in May with the sale of four power plants to APT Generation for an undisclosed amount. Tenaska Capital partnered with Warburg Pincus on that deal, flipping properties owned for barely more than a year.

Tenaska Capital, according to its website, invested “significant” capital in 2007, adding more than $800 million in assets, while total assets under management are now more than $3 billion. Tenaska Capital looks to acquire energy and power companies and assets in the United States. —Michael Baron

Prometheus blazing toward fourth fund

Prometheus Partners, a micro-cap buyout firm based in Atlanta, is nearing a close on its fourth fund.

The target is not known, but it likely will not exceed $50 million. The firm raised $20 million for Prometheus I, $45.5 million for Prometheus II and $40 million for Prometheus III.

The firm, which focuses on franchise restaurants, seeks to do roll-ups or capitalize on fast-growing companies with enterprise values between $10 million and $30 million.

Blue Horizon seeks $150M

Blue Horizon Equity, a San Francisco-based buyout firm, is seeking to raise $150 million for its debut fund, LBO Wire reported. The firm will invest with a focus on healthy lifestyle companies.

Managing partners of Blue Horizon are John Hommeyer (who most recently was with Clorox and and Hotwire before that), Alan Nichols (previously an operating partner at Golden Gate Capital) and Scott Wu (a co-founder of FTVentures).

Indy mezz firms raises $116M

Centerfield Capital, an Indianapolis-based mezzanine firm, has closed its second fund with $116 million in capital commitments, according to LBO Wire.

Alta aims for $150M

Alta Growth Capital is targeting $150 million for its debut fund, according to LBO Wire. The Mexico City-based firm plans to focus on mid-market opportunities in Mexico, and was formed by Scott McDonough (formerly with vSpring Capital) and Erik Carlberg and Rafael Payro (who both were at Baring Latin America).