Though it came in $84 million under its target for Trivest Fund III, which recently closed at $316 million, middle market buyout specialist Trivest was nonetheless able to raise money from 19 new LPs for its latest fund.
“Our returns on capital average four-to-five times for every dollar invested,” said Mark Abbott, a senior managing director at the Miami-based firm, in explaining how Trivest’s “very good track record” helped to draw so many new LPs to Fund III. “And our gross IRR is in the 30% range,” he added.
At the same time, the reasons Fund III came in under its target were twofold, Abbott said.
Because Trivest went to market with the new fund about two years ago, the firm was still “combating the dotcom phenomenon” for about the first five months of fund raising.
Trivest has focused since its inception 20 years ago on middle-market, growth-oriented companies in niche manufacturing, consumer products and business services. Even at the height of the Internet craze, dotcom companies were never a focus for Trivest.
“Then when the market went south in March 2000, we confronted the issue of resource allocation,” said Abbott.
Still, Trivest’s solid track record and more traditional strategy helped to win over 27 LPs in total. Among the institutional investors that contributed $10 million or more to the new fund were Bank Boston, CIBC, First Union, Southern Farm, Sun Trust, MetLife, PNC Financial Corp., Massachusetts Mutual Life Insurance Co. and Deutsche Bank, among others. Deutsche Bank also acted as placement agent.
Several high-net-worth individuals also contributed.
Trivest’s new fund has invested roughly $70 million to date with the new fund. It acquired Aero Products International Inc., which makes the AeroBed, in June, and Directed Electronics, a car alarm manufacturer, in July.
Holly Werner can be contacted at: Holly.Werner@tfn.com