Pandemic be damned!
Sky Island Capital, launched by the former chief investment officer and partner at Insight Equity, raised more than $100 million for a first closing on its debut fund, a source told Buyouts.
The firm is one of the few first-timers in the pandemic-slowed market, where limited partners are generally sticking to their well-established managers. This makes it even more challenging for first-timers to raise funds.
But Sky Island seems to be pushing through. The firm is targeting $225 million for Fund I, which will focus on manufacturing companies for various industries like advanced materials, building products, consumer products and food and beverage.
The firm is targeting a 30-percent-plus internal rate of return and a 3x multiple for the first fund, the person said.
It’s not clear when Sky Island could hold a final close. Metric Point Capital is working as placement agent on the fundraising.
Jack Waterstreet, former CIO and partner at Insight Equity, launched Sky Island in 2018. He joined Insight Equity in 2009, before which he worked at Brockway Moran & Partners.
Waterstreet formed Sky Island alongside partners Pat Murley and Will Dobbs. The firm is jointly owned by Waterstreet, Murley and Dobbs, according to Sky Island’s Form ADV. It managed about $125 million as of Dec. 31, 2019, the Form ADV said.
Murley, responsible for overseeing the operations of Sky Island’s portfolio companies, is chairman and chief executive at Material Sciences Corp. Murley worked with several PE-backed companies including those with Aurora Capital, Insight Equity and Peak Rock Capital, according to Sky Island’s website.
Sky Island acquired a majority stake in Material Sciences in May 2019. Material Sciences makes advanced materials and specially coated metals for a variety of end markets.
Dobbs was a partner at LongWater Opportunities prior to joining Sky Island. Before, he worked at Insight Equity, where he was a vice president; before that, he was an associate at Quad-C Management.
Last year, the firm hired Ben Hughes to lead the firm’s business development operations, and Michael Marsh as an associate.
In February, the firm made a majority investment in Polished Metals, a polisher and supplier of architectural and ornamental metals, Sky Island said at the time.