Firm 1: Prophet Equity
Fund: Prophet Equity I LP
Target: $250 million
Amount Raised: $250 million
Firm 2: Insight Equity
Funds: Insight Equity II LP, Insight Equity Mezzanine I LP
Targets: $500 million, $250 million
Amounts Raised: $435 million, $90 million
When they launched fundraising in the summer of 2008,
Last month Prophet Equity closed its oversubscribed debut fund at its hard cap with $250 million in commitments and a $25 million general partner commitment. The firm was founded by Ross Gatlin, who left Insight Equity in 2007 in part because his former employer was planning a significant increase in fund size for its second vehicle. Prophet Equity plans to maintain a fund size of $250 million for future vehicles, a promise that limited partners were attracted to, Gatlin said. LPs also like
“Anybody who said they had a problem with our terms was probably a little bit disingenuous,” Gatlin said. “It would not be the reason they didn’t not invest with us; I made sure to remove that as an issue from the outset.” In addition to LP-friendly terms, reaching out to international investors and building momentum through rolling closes were integral to the fund meeting its target, he said.
Insight Equity, led by CEO Ted Beneski and COO Victor Vescovo, also closed its new turnaround fund, but below its initial target. Last week the firm announced the close of its
In addition to a larger target and new mezzanine strategy, Fund II has a performance-base carried interest. The firm takes a 30 percent carried interest rate on deals with returns greater than 4.5x, 25 percent on returns between 2.5x and 4.5x and 20 percent on deals with returns below 2.5x.