Sterling Capital Ltd. is expected to close its debut buyout fund with $250 million to $300 million in its coffers before the end of the year.
The Baltimore and Chicago-based firm has been in the private equity business since 1986, investing in buyout, venture capital and commercial real estate deals. It did not, however, raise a committed venture capital fund until 1999 when the firm closed Sterling Venture Partners LP with $140 million under management. Sterling Capital Partners LP is the firm’s first dedicated buyouts offering. The firm is expected to launch a dedicated commercial real estate fund at a still undetermined date in the future, says Alan Macksey, a Baltimore-based managing director with the firm.
Sterling’s buyout fund is set to focus on small- and middle-market buyout deals in the direct marketing, broadcasting and communications, and specialty distribution and manufacturing industries. The firm’s buyouts portfolio currently-deals that the firm closed before it began raising a dedicated buyouts fund-includes Atlantic Premium Brands, a packaged meat distributor in Northbrook, Ill., Chicago-based FastWeb Inc., a Web site filled with college information, and Gray Supply Company Inc., a light bulb supplier in East Chicago, Ind.
Sterling Capital is targeting institutional investors. Fund-raising for about a year, already the Pennsylvania State Employees’ Retirement System has committed $15 million to the fund. It is the $21.8 billion pension plan’s first investment with the firm, and it is an opportunity for the plan to “diversify its investment portfolio,” says PennSERS spokesman Sean Sanderson. Although Sterling’s Macksey would not discuss fund-raising, investors in the firm’s venture capital funds include Deutsche Bank, T. Rowe Price .
In related news, Sterling recently led a $200 million leveraged buyout of six oil tankers from Amarada Hess Corp.
Contact Carolina Braunschweig