PE fund-raising briefs

Blackstone raising cleantech fund

The Blackstone Group is raising a dedicated cleantech fund, as first reported last week by peHUB, a website affiliated with PE Week.

The firm announced late last week that it has formed a dedicated cleantech investment group, but did not mention the fund. It will be led by James Kiggen, who previously focused on growth stage and late stage cleantech deals for AllianceBernstein. Among his deals, Kiggen worked on lithium-ion battery developer A123Systems Inc. and Powerspan Corp., a provider of multi-pollutant control systems.

The Blackstone fund cleantech will follow a similar model to AllianceBernstein’s—which is more venture capital than buyout—with average investments of between $30 million and $50 million.

A firm spokesman declined comment. —Dan Primack

Wind Point sails to $760M in first closing

Wind Point Partners

, a Chicago-based firm that acquires mid-sized companies in business services, health care and other fields, held a first close of $760 million on its seventh fund in late July. The latest close makes the fund, which has a $1 billion target, already larger than its $700 million predecessor.

About 80% of the commitments to the first close came from limited partners re-upping with the firm, and 20% are new LPs. The fund, which launched earlier this year, expects to hold its final close at the beginning of 2009. Fund VII is not using a placement agent.

Limited partners include the Teachers’ Retirement System of the State of Illinois, which committed $25 million to Wind Point Partners VI. Other LPs include DaimlerChrysler Corp., Northwestern Mutual Life, State of Michigan Retirement Systems, The State of Wisconsin Investment Board, Illinois State Board of Investment, the private equity arm of Ontario Teachers’ Pension Plan, Mass Mutual Life Insurance, PPM America and Teachers’ Merchant Bank. —Nancy Gordon

Avista aims for $3B

Private equity firm Avista Capital Partners has launched a $3 billion second fund, according to a regulatory filing. The firm invests in energy, health care and media deals in which it may take a controlling stake or an influential minority position.

The New York-based firm raised $2 billion for its previous fund, which closed in 2006.

Portfolio companies include information company Thompson Publishing (which is not affiliated with Thomson Reuters, publisher of PE Week), newspaper publisher The Star Tribune Co., oil-drilling information company GeoKinetics and biologics outsourcing company BioReliance, according to the firm’s website.

Avista is using Merrill Lynch & Co. as a placement agent, according to the filing. Thompson Dean and Steven Webster are the firm’s co-managing partners. —Alexander Haislip

Citigroup raises $77M

Citigroup Private Equity Partners has raised $77.4 million from 107 investors toward its third fund, according to a regulatory filing. The filing does not specify a target for the new fund.

Investors include John Barber, Sheri Cabasso, Ranesh Ramanathan, Michael Froman, Millie Kim and Allen Parker. The fund’s investors have paid a minimum of $571,970 to be included in the fund, according to a regulatory filing.

Citigroup Private Equity Partners III is listed as a funds of funds, according to Thomson Reuters (publisher of PE Week). The New York-based firm also makes direct private equity investments from a generalist fund, called Citigroup Capital Partners II, which closed on $3.3 billion in January 2007. —Alexander Haislip

TSG creates consumer growth fund

When is a new fund not a new fund? The answer is when the new investment vehicle will invest existing capital.

Such was the case last week when San Francisco-based TSG Consumer Partners announced a dedicated fund focused exclusively on investments in emerging consumer growth brands. The fund, TSG Consumer Growth Fund, will invest between $15 million and $30 million in high-growth consumer brands with sales of $30 million or more in such categories as food and beverage, health and beauty, household products, pet and other consumer packaged goods.

TSG will invest the new fund from existing capital. The firm’s most recent fund, TSG5, which closed on $875 million in 2007, will continue to seek larger equity investments of up to $100 million in later stage consumer brands in similar sectors.

TSG Managing Director Yasser Toor says that the firm—whose portfolio has included Famous Amos Chocolate Chip Cookies, Terra Chips, MET-Rx Nutrition and Smart Balance Foods, among others—still has about $700 million left to invest from TSG5.

Toor expects the firm to invest up to one-fourth of its existing funds through the TSG Consumer Growth Fund. The advantage of such a structure, he says, is that TSG can focus on pursuing smaller transactions in a strategic manner and appropriately allocate resources to the effort. Toor says the new fund did not require LP approval, because “we are still investing in the same category and similar companies to what we raised capital for.”

When asked if deal flow was slow or if the firm is being impacted by the credit crunch, Toor insisted that neither was what promoted the new fund.

“We have strong deal flow,” he says. “We closed on two deals in Q1 and are currently working on several others. We just want to re-emphasize our continued commitment to investing in consumer brands at early as well as later stages in their development.” —Alastair Goldfisher

ABRY inches closer to $800M target

ABRY Partners is nearing the finish line for its ABRY Advanced Securities Fund, which the firm will use to invest in senior debt issued by non-investment-grade media companies.

The fund, which has an $800 million target, will focus on buying the less-liquid bank loans of middle-market companies. The firm closed on $670 million at the end of July.

The Boston-based firm, which launched the fund in October 2007, seeded the fund with $20 million and intends to use about 25% leverage. The firm is targeting a gross return of at least 20%, and providing investors a preferred return of 9%, according to one LP’s investment advisory committee update.

Commitments to the fund have come from the Retirement Board of the City and County of San Francisco ($25 million); Pennsylvania State Employees’ Retirement System ($25 million); and the University of Minnesota Board of Regents ($15 million).

Earlier this year, ABRY Partners closed its most recent buyout fund, its sixth, with $1.35 billion in commitments. —Nancy Gordon