Firm: Riverside Partners
Fund: Riverside Fund IV
Amount Raised: $406 million
Target: $325 million
Placement Agent: Atlantic Pacific Capital
General Partner David Belluck said the decision to increase fund size—the firm’s predecessor fund was $225 million—made sense after building up Riverside Partners’s team and investment pace over the past several years. But the process wasn’t as simple as with past funds.
“In 2008, we thought we’d have a fast fundraising with tremendous support and raise it all from existing investors,” he said. “Then you saw what happened in Q4  and Q1 of 2009.” Because there was so much uncertainty in the economy, and investor sentiment had soured toward private equity, Riverside decided to hire Atlantic Pacific Capital, a placement agent it had not previously worked with.
The decision proved to be a wise one: Atlantic Pacific introduced the firm to a broader set of investors. Where past Riverside Partners funds were made up of North American university endowments and foundations, the new vehicle includes commitments from public pension funds, funds of funds and European investors.
In addition to raising its fourth fund, Riverside Partners spent 2009 doing deals; the firm completed 12 last year, leaving its third fund fully deployed. One deal, an investment in voice-assisted work system provider Vocollect, used capital from the new fund. Belluck said the firm is likely to continue its dealmaking pace in 2010, as it is too early to focus on exits from companies in Fund III, and Fund II is fully realized.
Riverside Partners invests in health care and technology companies generating EBITDA of $5 million to $25 million on revenues of $20 million to $200 million.