Berkshire closes Fund IX on $5.5 bln

Berkshire Partners closed its ninth fund on $5.5 billion, with the GP as the largest investor in the fund.

Fund IX launched late last year and saw strong demand from limited partners. Investors in Fund IX include endowments, foundations, pensions and financial institutions.

Berkshire closed 2011 vintage Fund VIII, which had a tiered carry structure, on $4.5 billion. In Fund VIII, the GP was slated to receive 25 percent carried interest rate if the fund hit certain benchmarks. It’s not clear if that’s the case for Fund IX.

Fund VIII was generating a 5 percent internal rate of return as of Sept. 30, according to performance numbers from the Maine Public Employees’ Retirement System.

Berkshire invests in middle market companies in partnership with management. The firm is expected to buy companies with acquisition values between $200 million and $2 billion, investing between $50 million to $500 million of equity in each company.

Berkshire’s private equity investment staff numbers over 60 professionals and is led by the firm’s 24 managing directors.

Weil, Gotshal & Manges LLP served as fund counsel. The firm did not use a placement agent.

Photo courtesy of REUTERS/Jonathan Ernst