Wellspring Likely To Hit Cap In Fall

Firm: Wellspring Capital Management LLC

Fund: Wellspring Capital Partners V

Target: $1.3 billion

Amount Raised So Far: $925 million

Placement Agent: Credit Suisse Securities (USA) LLC

Legal Adviser: Paul, Weiss, Rifkind, Wharton & Garrison LLP

Wellspring Capital Management LLC will likely reach or at least get close to the $1.3 billion cap of its latest vehicle, which it intends to close at the end of October, according to a source with knowledge of the situation. As of early September, the firm had raised $925 million for Wellspring Capital Partners V. The firm’s fourth fund closed in 2005 with $1 billion.

The New York City-based generalist invests in North American companies with values of at least $75 million, usually cutting checks for $75 million to $150 million per transaction, although it can go higher. The firm invests in a number of sectors while avoiding telecom, high-technology, real estate and commodity-based businesses.

In early August, Wellspring Capital announced it had acquired Jen-Coat Inc., a packaging maker for the food, health care and industrial markets, from CGW Southeast Partners. No financial terms were disclosed.

The firm’s backers include the Arkansas Teacher Retirement System and the Florida State Board of Administration. Fund V’s supporters include the British Columbia Investment Management Corp. ($40 million); the Kansas Public Employees Retirement System (up to $30 million); and the West Virginia Investment Management Board ($50 million).

The vintage-1998 Wellspring Capital Partners II had generated an IRR of 20.1 percent as of March 31, 2010, and an investment multiple of 1.47x, according to data from the Oregon Public Employees Retirement Fund.

Managing Partner Greg Feldman co-founded Wellspring Capital in 1995. Previously he served as head of acquisitions at EXOR America Inc., the U.S. investment arm of the Italian corporation Agnelli Group.