Vestar Back On Tour –

As if there weren’t enough elite firms out fundraising, Vestar Capital Partners has thrown its hat into the ring, and is now seeking $3.5 billion for its latest fund, Vestar Capital Partners V, LP.

According to filings with the Securities and Exchange Commission, the New York-based buyout group has hired Monument Group to market the fund, and has set a floor of $10 million for the minimum LP investment it will accept.

Vestar sits among the old guard in private equity. The firm was launched in 1988, when Daniel O’Connell and others in First Boston’s merchant banking division split from the bank to form the group. O’Connell was joined by James Kelley, Norman Alpert and Sander Levy, all of whom remain at Vestar.

While firms such as Blackstone Group and Carlyle have redefined what is considered the large market, Vestar is among those that float between the middle market to the newly established smaller end of the large market. According to Vestar’s website, it targets businesses with enterprise values ranging from $100 million to $3 billion. The group doesn’t specialize in any one industry, and has in the past invested in aerospace, consumer products, financial services, industrial products, media, healthcare and chemicals, among other sectors.

So far this year, Vestar has kept a fairly low profile, with scattered activity buying and selling. In January, the firm acquired Cesare Fiorucci S.p.A., an Italian producer of cured meats, in a ?360 million deal, and in May the group announced the hiring of Clear Channel Vet Kenneth O’Keefe, who had served as president and COO of the media company’s radio division. The firm also exited its minority investment in RedPrairie Corp. in June, through a sale to Francisco Partners, and in February saw its Valor Communications Group platform go public in a $441 million IPO.

Last year Vestar was more active and in the fourth quarter alone sold medical outsourcing company Sheridan Healthcare to J.W. Childs Associates, assisted in the launch of the Wilton Re Holdings reinsurance outfit, led a recap of Border Media Partners, and was rumored to be negotiating an $800 million buyout of the Dockers brand from Levi Strauss & Co., a deal that reportedly fell apart.

Vestar has three domestic offices, in New York, Boston and Denver, and has also established a presence overseas, with outposts in Paris and Milan.

The new fund, if it reaches its $3.5 billion target, would be roughly $1 billion larger than its predecessor Fund IV. That vehicle, which was raised in 1999, has called down more than 66% of its capital and has generated an IRR of 10%, according to “The 2005 Private Equity Performance Monitor.”