Firm: Rockland Capital
Fund: Rockland Power Partners LP
Target: $350 million
Amount Raised: $300 million
Placement Agent: BerchWood Partners
Legal Adviser: Bingham McCutchen LLP
The fund could still grow bigger. Limited partners that already have committed to
This is Houston-based Rockland Capital’s first formal fund, but the firm has been investing since 2003 via a “pledge fund,” in which capital was raised on a deal-by-deal basis from other private equity firms and rich people. The firm has already exited four of its six pledge fund deals, including Midlands Co-Generation Venture, a gas-fired cogeneration plant, selling it to
More than 40 percent of the capital raised so far for the new Rockland Power Partners fund has come from endowments and foundations, including a university endowment based in North Carolina. Other backers include a large real asset fund of funds.
In the fundraising, “what was critical for us is that we had a strategy that fit a lot of investors’ desires right now,” said Scott Harlan, a partner at Rockland Capital. “It’s investing in the small and mid-market. It’s an infrastructure-like investment with an active management component and a focus on restructuring. Plus, a lot of us have been working together since 1998,” he said.
The shop charges the standard 2/20 fee structure. “We did not have to give economic concessions,” Harlan said. “A few investors asked for that, but we held our ground.” However, the agreement is LP-friendly, with backers having a little more control than they would have had three years ago, Harlan said, if the firm had been forming a fund then. For example, investors have more say in when the investment period ends, and there’s a fairly tight key-man provision, he added.
The sweet spot for the firm is control-stake deals of $30 million to $50 million, but it can do larger deals with co-investors. Over the five-year investment period, the team intends to do eight to 10 transactions.