Prospect Partners LLC closed its third fund above the original hard cap of $185 million. Prospect Partners III LP picked up $200 million in commitments. The Chicago-based shop’s fund II closed in 2004 at $165 million. It plans to use the latest fund to invest exclusively in small companies based in the U.S. across a range of specialty manufacturing, distribution and service industry segments.
Prospect Partners, LLC, a leading private equity firm investing in smaller lower-middle-market companies, today announced the successful closing of its third private equity fund, Prospect Partners III, L.P. (Fund III), at $200 million, above the firm’s original hard cap of $185 million. Fund III is the successor to Prospect Partners II, L.P., a $165 million fund closed in 2004, and Prospect Partners, L.P., the firm’s $105 million debut vehicle raised in 1998. Prospect Partners now manages $470 million in committed capital. The majority of the firm’s Fund III commitments came from prior limited partners, joined by several new investors.
“We are very pleased with the reception Prospect Partners III received from such a highly-respected group of institutional investors”
Like its predecessor funds, Fund III will invest exclusively in small companies in the United States across a broad range of specialty manufacturing, distribution, and service industry segments. Specifically, Prospect Partners targets management-led leveraged recapitalizations and acquisitions of niche market leaders that generate revenues typically under $75 million, backing strong management teams of well-positioned, growth-ready companies.
Limited Partners in Fund III include leading global financial institutions, financial asset management firms, fund-of-funds, and university endowments. Among the firm’s investors: Goldman Sachs & Co.; Performance Equity Management, LLC; J.P. Morgan Asset Management; the University of Notre Dame; the Northern Trust Corporation; Commonfund Capital; and RCP Advisors, LLC.
Prospect Partners has become the nation’s most active private equity buyer of smaller lower-middle-market companies. In the last 12 years, the firm has invested opportunistically nationwide in nearly 80 leading companies across more than 50 niche industry segments.
“We are very pleased with the reception Prospect Partners III received from such a highly-respected group of institutional investors,” said Rick Tuttle, a Prospect Partners Founding Principal. “The ongoing support of our long-term limited partners is an indication of the success Prospect Partners has had in working with talented management teams to build strong companies and achieve great outcomes. We see tremendous continued opportunities in the small-company market, and remain committed to being the top private equity firm focused solely on investing in this segment.”
Prospect Partners is led by Mr. Tuttle along with Founding Principal Louis Kenter, Principals Erik Maurer and Maneesh Chawla, and Vice Presidents Brad O’Dell and Brett Holcomb. William Glastris, Jr., a co-founder of the firm, has been transitioned to Advisory and Founding Principal and will continue to provide Board-level counsel to existing portfolio companies.
Prospect Partners’ varied portfolio includes Littleton, N.H.-based Tender Products, Inc., manufacturer of popular personal-care products under such brands as AfterBite® and Ben’s®; Chicago, Ill.-based Kronos Foods, Inc., producer of Mediterranean foods like gyro meat and pita bread; Dallas, Texas-based Education Futures Group, LLC, operator of regional post-secondary vocational schools under the Vista College brand; St. Paul, Minn.-based ESI Lighting, Inc., distributor of energy-efficient lighting systems; and Los Angeles, Calif.-based Gold Star Food Service, Inc., regional foodservice distributor to public schools.
Kirkland & Ellis LLP served as legal advisor to Prospect Partners in the formation of Fund III. The firm did not use a placement agent.
About Prospect Partners, LLC
Prospect Partners is a leading private equity firm investing in smaller lower-middle-market companies, managing $470 million in three funds. A highly experienced, active, and committed small-company investor, Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues typically between $10 million and $75 million. Since its inception in 1998, Prospect Partners has invested nationwide in nearly 80 companies within a broad range of niche manufacturing, distribution, and specialty service markets. Based in Chicago, Ill., Prospect Partners also has an office in Menlo Park, Calif. For more information, visit www.prospect-partners.com.