Berkshire Partners Raises $4 Bln in Just Months For Eighth Fund–CORRECTED

Some PE firms may be having problems fundraising but don’t tell that to Berkshire Partners.

The Boston-based firm has been marketing for their eighth fund, which is clocking in at $4 billion, three sources say. What is so incredible is that Berkshire only began fundraising in late January and is expected to announce a first close in the next week, a source says. A final close for Berkshire Fund VIII LP is seen coming 60 days after.

“There was massive interest,” a second source says. “This is one of the must-have funds of 2011.”

Berkshire did not use a placement agent, I’m told.

The firm’s last fund, Berkshire Fund VII LP, raised $3.1 billion in 2006. The firm’s sixth fund collected $1.7 billion in 20072. Fund VII has a net IRR of 6.9 percent while the sixth fund touts a net IRR of 23.2 percent, according to Sept. 30 data from CalPERS (CORRECTION — Fund VI was raised in 2002, not 2007).

Berkshire typically invests between $50 million to $500 million equity per deal. The PE firm focuses on sectors including consumer products, retailing and related services, business services, transportation, energy as well as industrial manufacturing and communications. Last week, Berkshire recapped Engineering Solutions & Products, a government services provider. Berkshire and Rhône, in January, made a minority investment in Coty, the beauty company.

While fundraising is rebounding this year, firms are taken longer to market. The Gores Group took 18 months to collect their third fund, which came in at $2 billion. EnCap Investments spent 9 to 10 months to raise $3.5 billion for their eighth upstream fund.

Why did Berkshire do so well so fast? The PE firm had great numbers, was in the right space (growth), and has “a really deep LP base that committed to re-up early, creating the momentum,” the second source says.

Officials for Berkshire declined comment.

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