Cortec Group has held a first and final closing of its seventh institutional private equity fund, Cortec Group Fund VII LP, at its hard cap of $2 billion.
Cortec began raising Cortec VII in August 2019 with a $1.9 billion target. After slightly more than one month of investor due diligence meetings, the firm had received written capital commitments above its hard cap.
Limited partners in the new fund include both existing investors and a select group of new investors including US and international insurance companies, pension plans, high net worth families, and endowments. Two noteworthy data points for this fundraise are that nearly thirty current and former Cortec portfolio company senior executives committed nearly $35 million to Cortec VII, and no single limited partner accounted for more than 5% of the fund’s committed capital.
“We are extremely gratified by the strong response we had to Cortec VII from both existing and new investors,” said Dave Schnadig, a managing partner of Cortec. “We believe our talented and long-tenured leadership team, differentiated and difficult-to-replicate business model and consistent top quartile performance over the past 20 years helped drive the rapid close of Cortec VII.”
The firm’s earlier fund, Cortec Group Fund VI LP, closed with $1.1 billion of capital in May 2015. For the third consecutive fundraise, Cortec did not use a placement agent.
Cortec has not made any investments for its new fund but its sixth fund is invested in seven companies as follows:
- Center for Vein Restoration, a Maryland-based manager of medical clinics providing treatment for varicose and spider veins (acquired in January 2016);
- Chauvet & Sons, a Florida-based developer and marketer of branded entertainment and architectural lighting products used in night clubs, hotels, churches, and theaters (acquired in April 2016);
- EVP EyeCare, a Colorado-based operator of ophthalmology clinics and ambulatory surgery centers (acquired in December 2016);
- Groome Transportation, a Virginia-based provider of van service between airports and campus shuttle services to academic and institutional customers (acquired in January 2018);
- Window Nation, a Maryland-based distributor of replacement windows, doors, roofing and siding products used for residential repair and remodeling (acquired in January 2018);
- Aspen Medical, a California-based designer and manufacturer of spinal orthopedic bracing products (acquired in June 2019);
- Rotating Machinery Services, a Pennsylvania-based provider of aftermarket repair, maintenance and overhaul services for large, highly engineered rotating machinery including centrifugal compressors, axial air compressors, and steam turbines (acquired in June 2019).
Cortec invests in US and Canadian companies with revenues of $40 million to $300 million and EBITDA of $7 million to $35 million. Sectors of interest include healthcare products and services, business and consumer products, value-added distribution and specialty services. The firm was founded in 1984 and is headquartered in New York City.
In tandem with the closing of the new fund, Cortec has announced that when it makes its first capital call for Cortec VII the firm will promote several executives to more senior positions. Jon Stein and Jeff Shannon, each of whom has been with Cortec Group for nearly 20 years, will join Dave Schnadig, Jeff Lipsitz and Mike Najjar as managing partners; while Bill Tucker, Doug Kruep, Rob Whipple and Ajay Chokshi will all be promoted to partner from managing director. Earlier in 2019, Allie Klazkin, a ten-year Cortec team member, was promoted to managing director from vice president.
“We’re very proud of the continuing growth and evolution of our leadership team,” said Mr. Lipsitz. “We now have ten senior leaders plus our founder, Scott Schafler, who remains committed to Cortec VII, helping to add value to and grow entrepreneur-led, family-owned and other companies.”
Kirkland & Ellis provided legal services to Cortec on this fundraise.
© 2019 Private Equity Professional | November 21, 2019