Kohlberg & Co sets $2 bln target for Fund VIII

  • New fund to write larger checks for middle market funds
  • Louisiana Teachers’ commits up to $75 mln to Fund VIII
  • Firm’s founder, Jerome Kohlberg, passed away last year

Kohlberg & Co set a $2 billion target for its newest private equity fund, according to investment memos obtained through a public-records request.

Kohlberg & Co, which closed its previous fund on $1.6 billion in 2013, will use Kohlberg Investors VIII to acquire middle-market industrial manufacturing, consumer-product and service-based companies, according to a Hamilton Lane memo distributed at Teachers’ Retirement System of Louisiana’s Aug. 4 meeting.

Fund VIII will invest as much as $300 million of equity per deal, an increase from previous funds, the report says. An archived version of the firm’s website indicates Kohlberg & Co’s equity checks topped out at $200 million as of mid-2015.

“Kohlberg has refined its approach across multiple funds and is well positioned to continue to succeed in this strategy going forward,” Hamilton Lane wrote in its report.

Kohlberg & Co could not be reached for comment.

Louisiana Teachers’ committed as much as $75 million to Fund VIII at the meeting, pending final negotiations, spokeswoman Lisa Honore told Buyouts in an email. Hamilton Lane recommended the fund to the retirement system’s board.

The $16.6 billion retirement system is also an LP in Kohlberg Investors VII, which was netting a 14.8 percent internal rate of return and 1.2x multiple as of Dec. 31, the Hamilton Lane report shows. The firm’s $1.5 billion 2007 vintage Fund VI netted a 16.7 percent IRR as of the same date.

Jerome Kohlberg, a founding partner of Kohlberg Kravis Roberts & Co, left KKR to launch the eponymous firm in 1987. In 2007, Kohlberg began to scale back his involvement at the Mount Kisco, New York, middle-market firm. He passed away last year.

Kohlberg & Co is now led by Samuel Frieder and Gordon Woodward, both of whom have been with the firm for 20-plus years, the Hamilton Lane report says. Chris AndersonSeth HollanderBenjamin MaoShant Mardirossian, Evan Wildstein and Ahmed Wahla are also partners.

Action Item: Kohlberg & Co: www.kohlberg.com

Photo of Jerome Kohlberg courtesy of the Kohlberg Foundation