Reeve Waud, Waud Capital Partners

Waud Capital Partners, founded by ex-GTCR professional Reeve Waud, returned to the market with a sixth buyout offering.

The Chicago manager is targeting $1 billion for Waud Capital Partners VI, materials prepared for Plymouth County Retirement Association said. It is expected to wrap up in the summer of 2023.

Unlike many of its private equity peers, Waud did not greatly increase the new vehicle’s ticket size. On the contrary, Fund VI is seeking slightly less than the roughly $1.1 billion secured by both its 2019-vintage and 2017-vintage predecessors, according to PCRA documents.

This might have to do with LP pushback on accelerated GP fundraising and big step-ups in target sizes. Instances of pushback have grown in number since the start of 2022, especially on the part of cash-strapped LPs, perhaps signaling to new market entrants the importance of tempering expectations.

Waud did not respond to a request for comment on this story.

Reeve Waud launched his namesake shop in 1993, initially to undertake buyouts, recaps and consolidations of mid-market manufacturing, distribution and service companies. Originally a deal-by-deal investor, Waud in 1999 closed a debut fund at $100 million.

The firm has since zeroed-in on opportunities in high-growth healthcare services and software and tech sectors. It typically writes checks of $75 million to $200 million for control investments in well-run, scalable mid-market businesses in North America that address large, expanding, inefficient and fragmented spaces in subsectors of interest.

Waud has an executive-led style of investing. Prior to doing deals, it undertakes extensive research to identify attractive niches and then finds a seasoned operator to help source, acquire, manage and improve each platform company. The process is supported by WCP Ecosystem, a growth-oriented value creation engine.

Fund VI will maintain the strategy, making 10 to 12 investments over its lifetime, PCRA materials said.

The portfolio holds 16 active investments. One of them, Ivy Rehab, an outpatient physical therapy services provider, was recently the focus a single-asset continuation fund deal. To create more time and resources to back Ivy’s growth, Waud in the fall closed a fund anchored by Morgan Stanley Private Equity Secondaries.

Another portfolio investment, GI Alliance, a gastroenterology practice management company, was this year acquired in a physician-led buyout and recap backed by Apollo Global Management. Valuing the business at $2.2 billion, the deal facilitated Waud’s exit.

As of June, Waud Capital Partners V was earning a 1.5x gross multiple and a 25 percent gross IRR, according to PCRA documents. Fund IV was generating a 2.2x gross multiple and a 28 percent gross IRR.

Managing partner Waud shares leadership of the firm with partners Chris Graber and David Neighbours, who co-lead healthcare services investing, and partners Matthew Clary and Justin DuPere, who co-lead software and tech investing. Two other partners, Tim Lawler and Phil Olson, lead human capital and business development, respectively.

Along with the partners, the investment team totals almost 30. The entire Waud team numbers more than 70 professionals, including operating partners.