After fund-raising for 18 months, Pfingsten Partners LLC has closed its third fund at $284 million, exceeding its original target of $250 million. Pfingsten will use the fund to acquire middle-market manufacturing, distribution and specialty publishing companies.
Fund III looks much like Pfingsten’s last fund, but with only slight differences. Fund II, which closed in 1998, was $100 million and LPs were limited to the United States. The new fund broadened its institutional investor base domestically and overseas.
Limited partners in the new fund include Pantheon Ventures Inc., ATP Private Equity Partners (in Denmark), HarbourVest Partners, National Railroad Retirement Investment Trust, DuPont, WestLB Asset Management, Thrivent Financial for Lutherans, West Midlands Pension Fund, INVESCO Private Capital and HSBC Capital.
“We will probably do less co-investment because we have more capital,” says Thomas Bagley, a senior managing director with Pfingsten. “The only difference really is that this is the first time we raised money overseas, and that’s part of the reason for being oversubscribed.”
The fund expects to invest in eight to nine platform companies with transaction values of $25 million to $100 million for manufacturing and distribution companies, and $10 million to $50 million for specialty publishing companies.
Despite having foreign LPs, Pfingsten will only invest in the United States.