Sentinel Capital Raises $1.3B With One Close

Firm: Sentinel Capital Partners

Fund: Sentinel Capital Partners V LP

Target: $1.1 billion

Amount Raised: $1.3 billion

Placement Agent: Credit Suisse Securities (USA) LLC

“We are delighted at this fundraising outcome and grateful for the strong show of support from our existing investors and from several new, global investors,” said David S. Lobel, founder and managing partner of Sentinel Capital, in the firm’s press release announcing the end of fundraising. Executives at Sentinel Capital declined to comment beyond the prepared statement.

That “one and done” fund close handily exceeded the firm’s $1.1 billion target for the vehicle, according to a regulatory filing. The new fund, earmarked to make growth-oriented investments in lower mid-market companies, is also two-thirds larger than its predecessor, Sentinel Capital Partners IV LP, which closed in 2009 with $765 million.

Fund IV ranked No. 7 on the top 10 list of best-performing North America focused funds from 2006 to 2010, according to alternative-asset data provider Preqin, with a 1.62x investment multiple and an IRR of 40.5 percent, as of Dec. 31, 2012.

Founded in 1995 by Lobel and co-founder John F. McCormack, Sentinel Capital seeks to invest in companies with up to $35 million in EBITDA in eight industry sectors: aerospace/defense, business services, consumer, distribution, food/restaurants, franchising, healthcare, and industrials. The firm’s website lists 25 investing professionals, plus additional operating partners and financial managers.

Known investors in Sentinel Capital funds include the Alaska Permanent Fund Corp and the Illinois Municipal Retirement Fund, according to the Thomson One private equity database.

Sentinel Capital announced in July the formation of a new company, IEP Technologies, based on the carveout of several global units of United Technologies Corp that are focused on industrial explosion protection in the United States, the United Kingdom, Switzerland and Germany. To be based in Boston, IEP provides systems and services that suppress, isolate or vent potential combustible dust or vapor explosions in process industries. Financial terms were not announced.

In December, Sentinel Capital announced the sale of portfolio company Chromalox, a producer of electric heating systems for process control applications, to private equity firm Irving Place Capital. Terms were not disclosed.

As of year-end, Fund IV was more than 60 percent drawn, according to Preqin. In the latest fundraise, Credit Suisse Securities (USA) LLC was paid a fixed fee for advisory services, but was not to receive any sales commissions, finders’ fees or any other fees contingent upon subscriptions, according to a filing.

(Corrects headline to show firm raised $1.3B)