Private Advisors has closed its sixth private equity fund, Private Advisors Small Company Private Equity Fund VI, LP (Fund VI), with $350 million in commitments. The firm had been targeting a capital raise of $250 million.
Private Advisors and its employees, along with parent organization New York Life, committed approximately $51 million of the capital commitments. Over 50% of the capital came from existing investors in prior funds. The Fund VI investor base also includes foundations, endowments, family offices, and pension funds.
“We appreciate the continued support of our existing investors and are excited to welcome several new investors and strategic relationships outside the US,” said Chris Stringer, Partner and Head of Private Equity at Private Advisors. “Although the small company market has attracted many new institutional investors recently, we believe that it is Private Advisors’ long-standing, disciplined focus on this market segment that has allowed us to attract a number of new limited partners, including several non-US pension funds.”
Private Advisors makes fund-of-fund investments in North American-based lower middle market funds that have total capital commitments of less than $750 million. These funds primarily make growth equity, buyout, and distressed or turnaround investments in companies with enterprise values below $150 million. This is the threshold that Private Advisors uses to define the lower middle market.
Private Advisors has invested in the lower middle market since 1997. The firm believes that with proper manager selection, the small company market can offer investors consistently attractive private equity returns through an emphasis on growing underlying businesses. “In general, investors are recognizing the relative attractiveness of the small company market and the ability of private equity managers to create value through business building, in other words growing and improving underlying businesses, as opposed to other private equity strategies that are more dependent upon financial engineering or market timing,” said Mr. Stringer.
Private Advisors also co-invests alongside private equity funds that the firm knows and has a relationship with. The firm also makes secondary investments having entered this market in 2012 when it acquired Cuyahoga Capital Partners, a Cleveland-based secondaries focused private equity firm. In total, across all of its strategies, the firm manages approximately $6 billion in assets and has over 80 employees.
Private Advisors is an affiliate of New York Life Insurance Company and is based in Richmond, VA (www.privateadvisors.com).
© 2015 PEPD • Private Equity’s Leading News Magazine • 7-10-15