The total for the fund, the firm’s sixth, comes to $6.25 billion when including a $250 million commitment from professionals at the Los Angeles-based buyout shop, whose portfolio includes BJ’s Wholesale Club Inc., The Container Store Inc. and J. Crew Group Inc.
The firm, which informed investors last week that it had almost wrapped fundraising, is working through paperwork and other formalities before officially closing the fund “any minute,” one source told Buyouts.
The tally is impressive given a particularly challenging fundraising environment and the fact that, according to the same source, the firm didn’t offer any limited partners discounts on fees. Many firms today are offering discounts on management fees and other fees to induce commitments from wary investors.
Leonard Green “didn’t discount anyone,” the source said, because it “didn’t have to.”
The firm’s previous fund, which collected $5.3 billion in 2007, was generating a 1.3x investment multiple and a 14.90 internal rate of return as of September 30, 2011, according to the California Public Employees’ Retirement System. By that date, more than $309 million of CalPERS’s $400 million commitment to the fund had been drawn down. Its third and fourth funds, raised in 1999 and 2003, generated investment multiples of 2.30x and 1.50x, respectively, for CalPERS.
Leonard Green targets deals as large as $5 billion though most of its transactions range between $500 million and $2 billion in enterprise value.
The firm is led by Managing Partners Peter Nolan, Jon Sokoloff and John Danhakl, who are veterans of the corporate finance department of Drexel Burnham Lambert. Firm founder Leonard Green, a trailblazer who in 1969 established one of the first LBO firms, Gibbons Green van Amerongen, died in 2002.
Image credit: Leonard Green & Partners