New Funds

Vista Equity Partners announced today that it has closed Vista Equity Partners Fund IV (VEPF IV) at $3.5 billion, exceeding the initial target of $2.5 billion. Vista now manages over $6.6 billion of committed capital in its series of private equity funds.

“The successful closing of this fund is a continued endorsement by our limited partners of the strategy that we have refined over the last decade. Both our existing and our new investors have shown their confidence in our ability to acquire strategic assets, create value by implementing operational best practices using trained executives and ultimately realize consistent significant returns,” said Robert Smith, CEO and Chairman of Vista.

“VEPF IV will continue to build on Vista’s track record of creating value through the transformation of enterprise software, content and data driven businesses,” said Mr. Smith. “We are excited to have added a significant number of new limited partner relationships to the group of amazing limited partners which have supported us as we continue executing our strategy.”

VEPF IV has already announced the following four acquisitions; Turaz, a divestiture from Thomson Reuters; Vitera, the former Sage Healthcare Division of The Sage Group; CDC Software, a global provider of ERP solutions; and Misys, a UK based provider of treasury capital markets and banking services.

Vista Equity Partners was founded in 2000 and is focused on equity investments involving enterprise software businesses and technology-enabled solutions companies. Since its inception Vista has completed over 65 transactions totaling more than $15 billion in aggregate value. In 2011 alone Vista completed 21 acquisitions, including stand alone and add-on deals for its portfolio companies. Vista has over 50 investment professionals operating out of Austin TX, Chicago IL and San Francisco CA (www.vistaequitypartners.com).

Riverside Partners has held the final closing of Riverside Fund V, L.P. with $561 million of capital commitments. The fund was oversubscribed and achieved its hard cap in six months. Atlantic-Pacific Capital served as Riverside’s exclusive global placement agent and advisor.

“Just as it did for our Fund IV raise in 2009, the Atlantic-Pacific team drove an organized and targeted process that allowed us to be in and out of the market in a short timeframe,” said David Belluck, General Partner of Riverside. “This minimized distraction from our existing portfolio companies and from pursuing new investment opportunities. We very much value Atlantic-Pacific’s assistance in the process of fundraising.”

Fund V will continue Riverside’s focus on investments in established and growing middle market healthcare and technology-oriented companies that have revenues from $20 million to $200 million and EBITDA’s from $5 million to $25 million. Riverside Partners is based in Boston, MA (www.riversidepartners.com).

“In an environment where approximately 1,900 funds are raising capital, investors appreciated Riverside’s consistent strategy, proven performance, and highly impressive team,” said Jennifer Tedesko, Partner at Atlantic-Pacific Capital. “We wish Riverside and its limited partners mutually fruitful success in the coming years.”

Founded in 1995, Atlantic-Pacific Capital has raised over $50 billion for alternative asset managers seeking private capital. Typical projects include private equity, real estate, and infrastructure fund placements, as well as private placement financings in support of acquisitions, buyouts, and growth capital transactions. The firm has relationship managers and advisors in New York, Greenwich, Chicago, San Francisco, London, and Hong Kong (www.apcap.com).

Lakeside Capital Management has held a final closing of its second middle-market focused mezzanine capital investment fund, GMB Mezzanine Capital II, at $240 million, above the firm’s target. The fund has been licensed by the U.S. Small Business Administration as a Small Business Investment Company and is the second SBIC formed and managed by Lakeside Capital.

Lakeside exceeded its targeted fund size with a mix of limited partners, including family offices, regional and national banks and large institutional investors. “While the environment throughout was challenging, the appeal of the mezzanine investment class and the opportunities offered by our middle-market focus and well-developed sponsor relationships resonated with many investors. We are grateful for their confidence and support,” said Mike McHugh, Managing Principal.

To date, GMB Mezzanine Capital II has invested $58 million in ten portfolio companies, each of which is a manufacturer or distributor under private equity sponsor ownership. “Our team looks forward to supporting our private equity firm partners as merger and acquisition activity expands,” said Cully Olmanson, Managing Principal. “We believe that the timing for raising this new capital pool is right, and that our strong deal flow will provide ample high-quality transaction opportunities during its investment period.”
GMB Mezzanine Capital II invests from $3 million to $18 million in subordinated debt and non-control equity in lower middle-market companies with enterprise values under $100 million. The fund assists private equity and independent sponsors in buyout transactions, their portfolio companies’ growth capital and acquisition needs, and recapitalizations, across a range of U. S.-based industries.

Lakeside Capital’s prior fund invested $207 million in a geographic and industry diverse group of 29 portfolio companies from 2005 through 2010. All of the Lakeside’s investment team members have long been active in private company, middle market financings, investing in a wide range of businesses, transaction types and capital structures across multiple business cycles. The firm is based in Minneapolis, MN (www.gmbmezz.com).

Operations-focused private equity firm Industrial Opportunity Partners (“IOP”) has held a final close of its second fund, Industrial Opportunity Partners II, L.P., with $275 million of committed capital. IOP achieved its hard cap of $275 million for Fund II and was oversubscribed at its final closing, exceeding its original target of $250 million. “We are excited to have completed raising Fund II so quickly and with such strong demand,” said Kenneth Tallering, Senior Managing Director of IOP. “We appreciate the support and confidence of our Limited Partners, and we look forward to the opportunity to create value in our Fund II portfolio companies and to achieve strong returns for our investors.”

Founded in 2005, IOP focuses on acquiring and overseeing middle-market manufacturing and value-added distribution businesses, typically with revenues between $30 million and $350 million. IOP targets businesses with strong product, customer, and market positions and provides management and operational resources to support sales growth and operational improvements. The firm is located in Evanston, IL (www.iopfund.com).

IOP’s operating strategy is led by its dedicated, full-time Board of Operating Principals – a group of operating executives, each with over 30 years of experience, who guide and assist management teams in stabilizing, enhancing, and growing the value of their businesses.

“IOP’s committed Board of Operating Principals was a key factor in surviving the recession and in creating value in our portfolio companies. We believe the talents of our team truly resonated with our investors,” said IOP Managing Director Robert Vedra. “We believe IOP is well-positioned to pursue a broad spectrum of investment situations, ranging from profitable businesses that require management or other support to reach their full potential to businesses experiencing operational or financial distress.”
IOP’s first fund, Industrial Opportunity Partners, L.P. (“Fund I”), totaled $185 million of committed capital and was raised in 2006 and 2007. Fund I has completed 18 acquisitions: eleven portfolio companies and seven add-ons. The portfolio companies serve a variety of end markets, including transportation, construction, agriculture, building products, energy, and general industrial. In December, 2011, IOP completed its first full realization in its Fund I portfolio with the sale of FAS Controls, Inc., a manufacturer of electromechanical devices, pneumatic control valves and lighting products.

“We believe that the strength of our Fund I investment portfolio was a significant factor in the success of our Fund II fund raising efforts,” said Adam Gottlieb, IOP Managing Director. “It also is a testament to IOP’s value orientation and ability to execute on operational improvement strategies.”

Park Hill Group served as IOP’s placement agent and Sidley Austin provided legal counsel to the firm.

New York Life Capital Partners has held a final closing of its third mezzanine fund, NYLCAP Mezzanine Partners III, on March 30, 2012, with total commitments of $980 million, more than a 20 percent increase than its predecessor fund. “We are very grateful for the show of support we received from investors and are confident that our strategy of investing in the middle market, with longstanding sponsor relationships, will continue to deliver strong results” said Thomas Haubenstricker, CEO of New York Life Capital Partners.

The new fund will continue NYLCAP’s strategy of partnering with private equity groups by providing mezzanine financing to support their acquisition of middle market companies in the U.S. and Western Europe. To date, the fund has invested $235 million in 10 portfolio companies.

Investors in the new fund include public and private pension funds, financial institutions, insurance companies, family offices, select individuals and sovereign pools of capital. “Historically, investors in this asset class have been large financial institutions and insurance companies, however in this fundraising effort, we have seen an increased interest among new types of investors seeking attractive yields and consistent downside protection,” said Mr. Haubenstricker.

New York Life Capital Partners manages $8 billion of private equity assets, including direct equity, direct mezzanine, and limited partnership investments. New York Life Capital Partners raised its first mezzanine fund in 2002, and the existing team has invested $1.9 billion in 90 mezzanine transactions. As an affiliate of New York Life Investments, NYLCAP manages alternative assets for New York Life Insurance Company, its affiliates and other institutional investors. NYLCAP, together with its predecessor organizations, began investing in private equity partnerships in 1984 and has been an active, direct private equity investor since 1991. The firm is based in New York, NY (www.nylim.com).

AUA Private Equity Partners has been launched in New York as an operationally-focused, lower middle-market private equity firm. The new firm is led by Andy Unanue, former COO and current shareholder of Goya Foods. Mr. Unanue is partnering with the former principals of Gotham Private Equity Partners, who have integrated their operations into AUA Equity. Joining Mr. Unanue as founding partners in AUA Equity are Steven Flyer, David Benyaminy and Kyce Chihi.

AUA Private Equity Partners makes equity investments in companies in the consumer, media and business services sectors with a particular focus on Hispanic-oriented companies and family-owned businesses located in the United States. The new firm plans to invest $10 to $30 million of equity in companies that generate $3 million to $15 million in EBITDA. AUA Equity will make control and significant minority investments in a variety of transactions and structures including: traditional leveraged buyouts; growth equity; recapitalizations; and roll-up strategies. Since 1997, AUA Equity’s principals have made over 25 private equity investments which include: Reddy Ice Group, El Pollo Loco, TRUFOODS, Two-Twenty Records Management and Brighter Dental Care. The firm is based in New York, NY (www.auaequity.com).

“I am extremely pleased to be establishing AUA Equity with an outstanding team of private equity professionals and operating executives,” said Managing Partner Andy Unanue. “We have been working together for many years and I believe our combination of operational expertise and private equity experience uniquely positions us to identify compelling investment opportunities, especially in Hispanic-oriented companies and family-owned businesses, and create additional value in our portfolio companies.”

Messrs. Benyaminy and Flyer began their investment careers in CIBC’s Leveraged Finance and Merchant Banking Group and then helped establish Trimaran Capital Partners, a $1.0 billion private equity fund.

Mr. Chihi previously worked in Deutsche Bank’s Leveraged Finance Group and as an investor at an international family office.