Kohlberg Targets $3 Billion for Latest Fund

The private equity firm’s ninth flagship vehicle would exceed its $2.2bn predecessor

Kohlberg & Co. is seeking to raise the largest buyout fund in its 32-year history, according to a public pension document.

The vehicle, Kohlberg Investors IX LP, has a target of $3bn, according to a document from the Teachers’ Retirement System of Louisiana. The firm’s eighth fund closed with $2.2bn in late 2016.

The firm didn’t reply to requests for comment.

Based in Mount Kisco, NY, Kohlberg invests in companies valued between $200m and $1.5bn, in sectors including industrial manufacturing, consumer products, business services and others.

The firm was started in 1987 by Jerome Kohlberg, who had been one of the founders of KKR, and his son, James Kohlberg, now the firm’s chairman. On a day-to-day basis the firm is currently led by managing partner Samuel Frieder and chief investment officer Gordon Woodward, according to the Louisiana pension document.

Kohlberg’s previous three funds have earned strong returns, according to the document, which was prepared by Hamilton Lane , the pension fund’s consultant. The firm’s eighth, seventh, and sixth funds have recorded net internal rates of return of 17.7%, 17%, and 16.3%, respectively.

At a December 5 meeting, the Louisiana fund’s overseers approved a commitment of up to $50m to the new Kohlberg fund, a spokeswoman for the pension said by email. In addition, the pension fund approved up to $100m to invest with venture capital and growth equity managers through a separate account structure, the spokeswoman wrote.

The pension also committed up to $75m to Castlelake Aviation IV Stable Yield LP, a fund managed by Castlelake LP that invests in airplanes. That fund is targeting $1.5bn, according to the Hamilton Lane document.

Source: The Wall Street Journal

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