William Blair Nabs $403M for Fund VII

Compensating for a difficult fund-raising environment by promising it would not break with its traditional investment strategy, William Blair Capital Partners (WBCP) last week managed to close its seventh fund at $402.86 million.

The Chicago-based firm, which engages in venture capital, buyout and recapitalization investments, marketed WBCP VII for nine months and held an initial closing last November. David Chandler, a managing director at William Blair, said the vehicle will follow its fully-committed $270 million predecessor by continuing to invest in health care, business and communications technology and business and consumer service companies.

To date, WBCP VII has already invested in two companies: optical broadband provider Clear Communications Corp. and NuVasive. Lincolnshire, Ill.-based Clear, a provider of network management software for optical networks, received $10 million from WBCP as part of a $20 million financing. NuVasive, which developed a minimally invasive technique for spine surgery, also received $10 million from the VC as part of a $26.3 million financing at a post-money valuation of $75 million.

Over the next three to four years, WBCP expects to invest in 20 and 30 companies, with an average investment size of $20 million, except in early-stage plays where the amount would be lower. Most of the companies that are lucky enough to receive WBCP VII funding will be based east of the Rocky Mountains.

While Chandler declined to identify specific limited partners, he did say that investors were comprised of a variety of European and U.S. insurance companies, financial institutions and a high-net-worth individuals. Most LPs were repeat backers.

WBCP VII was structured with a 2% management fee.