Harvest Partners, one of the private-equity industry’s oldest midmarket firms, wants to raise $5.3bn for its ninth main buyout fund, according to pension documents.
If the New York-based firm reaches its target for Harvest Partners IX LP, the fund will be more than 31% larger than a $4.03bn predecessor that wrapped up in December 2019 and more than double the size of a $2.2 billion buyout fund Harvest raised in 2016.
Harvest Partners invests in midsize North American companies in industries that span business and industrial services, consumer, healthcare, industrial products and software. The latest fund plans to back 10 to 14 investments and commit an average of $200m to $600m each to the companies, according to documents from a Feb. 22 meeting of Los Angeles City Employees’ Retirement System’s board of administration.
The pension committed $50m to Harvest’s latest fund. The target companies would have enterprise values of $300m to $5and bn generate earnings of between $30m and $300m before interest, taxes, depreciation and amortization, the document said.
Investors in the firm’s previous buyout fund, Harvest Partners VIII LP, include Orange County Employees Retirement System, Los Angeles Water and Power Employees’ Retirement Plan and Ohio Police & Fire Pension Fund, according to WSJ Pro’s limited partner commitments database.
As of Sept. 30, the predecessor fund had produced a net internal rate of return of 35.4%, according to the Los Angeles pension system document. The pension had committed $50 million to it.
Harvest’s latest fundraising pitch follows the firm’s efforts last year to raise money for continuation funds that would enable it to extend its ownership of two individual portfolio companies, WSJ Pro Private Equity reported. Earlier this year, the firm also wrapped up its third structured capital fund with $1.28bn, to invest in non-controlling senior equity or junior debt of midsize North American companies.
The firm, which was founded in 1981, sold a minority stake in itself to Goldman Sachs Asset Management’s Petershill investment unit in 2018. Chief Executive Michael DeFlorio and President Jay Wilkins lead the firm with support from Partners Thomas Arenz, Stephen Eisenstein, and Ira Kleinman, the pension documents stated.
Source: PE News
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