Post-succession Court Square launches Fund V, targets $3bn

Court Square Capital Partners, spun out of Citigroup Venture Capital in 2006, is seeking $3 billion for a fifth flagship buyout offering.

The target for Court Square Capital Partners V was disclosed in Minnesota State Board of Investment documents. If reached, the vehicle would be 11 percent larger than its 2019-vintage predecessor, which raised $2.7 billion, the documents said.

Fund V comes roughly a year after Court Square announced a succession event that created new leadership. Among the changes was the elevation of managing partner Chris Bloise to president and the appointment of managing partner Joe Silvestri to chairman of the investment committee.

No mention was then made of Bill Comfort, the longtime head of Citi’s private equity business and reported leader of the spinout. Comfort, who may have retired, was previously included among Court Square’s team members. Silvestri, Mike Delaney and Dave Thomas are also founders (Delaney and Thomas became senior partners in the succession).

Today, Court Square has seven managing partners. Along with Bloise and Silvestri, they are Ian Highet, David Nguyen, Jeff Vogel, John Weber and Kevin White.

Court Square’s strategy resembles the one pursued at Citigroup. A key shared principle is a focus on mid-market buyouts, predominantly in the US.

The firm typically makes control investments of $75 million to $350 million in companies valued at $150 million to $1.5 billion and operating in four sectors: business services, healthcare, industrials and technology and telecommunications. Many targets are owned by families, founders or managers, with Court Square often being a company’s first source of institutional capital.

Targets, either independent companies or divestitures, are well-run and have earnings growth driven by favorable market dynamics, MSBI documents said, such as sector-specific trends, disruptive business models, products or services and M&A opportunities. Also of interest are situations where growth potential is unrecognized or untapped.

Across four funds – three of them raised since the 2006 spinout – Court Square has made 77 platform investments, MSBI documents said, among them the 19 investments of Court Square Capital Partners IV. To date, $9.9 billion has been deployed and $17.8 billion of value generated.

Recent platform investments include Team Select Home Care, a home care provider to mostly medically-complex pediatric patients, and Five Star Parks & Attractions, a developer and operator of large-format family entertainment centers. Both deals were announced this year.

Fund IV was earning a 1.4x net multiple and a 20 percent net IRR as of June, according to MSBI documents. Fund III was earning a 2.2x net multiple and a 20.6 percent net IRR.

Another scion of Citigroup Venture Capital, formerly known as Citicorp Venture Capital, is European buyout giant CVC Capital Partners, spun out in 1993.

Court Square declined to provide a comment on this story.