According to Co-CEO Geoff Rehnert, Boston-based Audax made the decision because it hasn’t deployed enough of its current fund to justify raising another. Even after doing ten add-on transactions this year, Fund III is only around 50% deployed. That means the firm is sitting on around $500 million of the $1 billion pool, which closed in 2007. Audax Private Equity invests $10 million to $100 million in transactions valued between $25 million and $500 million.
Rehnert wrote in an email: “Last Fall, we anticipated we would be further along investing Fund III at this point in time, but our investment pace has slowed as credit tightened and deal activity has slowed.” The fourth fund is expected to have a similar target to its predecessor.
Rehnert said the firm anticipates that by the fourth quarter, Audax Group will have deployed a larger chunk of fund three, allowing it to enter the fundraising market at that time.
It’s a different story for Audax Group’s mezzanine practice. Audax Mezzanine Fund II, has deployed more than 70% of its $700 million in capital. The firm is in the market with fund three with a $750 million target. Audax Group anticipates a fourth quarter close on the vehicle.
The firm also has a senior loan fund which has been investing since 2007. The vehicle isn’t open for new investors but “may reopen at a later date,” Rehnert said.