Pomona Exceeds FoF Target

Pomona Capital last week closed its fourth fund-of-funds, capping it at $250 million, and is preparing to hold a final close on its sixth secondary fund for more than $600 million.

The New York-based firm raised $50 million more for Pomona Partnership Holdings IV than it planned, due to strong demand from limited partners, says Michael Granoff, Pomona’s CEO.

Granoff says that the firm’s goal is to always keep its fund sizes modest. “There’s a limit to how much capital you can deploy in the highest quality funds,” he says. “We’re at a time in the private equity world where access to top-tier funds is limited.”

The firm’s new secondary fund, Pomona Capital VI, has already had a first close and is expected to hold a final close within the next month. Granoff declined to discuss Pomona VI, citing SEC regulatory concerns.

The firm’s previous secondary fund was held a final close on $582 million in 2001. That fund is already fully invested.

The new fund-of-funds has already made commitments to three venture funds and four buyout funds. Its venture commitments are for New Enterprise Associates’ $1.1 billion New Enterprise Associates 11 fund, North Bridge Venture Partners’ North Bridge VI and Sevin Rosen Funds’ Sevin Rosen IX.

On the buyout side, it has committed to Bain Capital’s $3.5 billion Bain Capital Fund VIII, BC Partners’ $6.8 billion BC European Capital VIII, Hellman & Friedman’s $3.5 billion Hellman & Friedman Capital Partners V, and Providence Equity Partners’ $4.25 billion Providence Equity Partners V.

Granoff says that the fund of funds does not have a specific allocation planned for VC vs. buyouts investments. The firm’s previous FoF, $135 million Pomona Partnership Holdings III, invested more heavily in buyouts than venture. That vehicle was raised in 2000.

Pomona’s secondary business that feeds its fund of funds’ business. The vast majority of funds that Pomona’s FoF invests in are vehicles that the firm already has a stake in as a secondary investor. Pomona holds interests in more than 200 funds. As an existing investor, Pomona has an edge over other potential LPs to get into top-tier funds, Granoff says.

Pomona did not disclose the names of its limited partners. LPs in past Pomona funds include BancBoston Investments, Blackstone Management Corp., Chase Capital Partners, Siguler Guff & Co. and South Ferry, according to Thomson Venture Economics (publisher of PE Week).