

Sterling Group, the Houston-based middle-market firm, took about three months of formal fundraising to raise the largest buyout pool in its history, with $1.25 billion in commitments forĀ Sterling Group Partners IV.
PartnerĀ Kevin GarlandĀ said Sterling Group was able to raise Fund IV quickly because of its team effort to stay in touch with LPs.
āWe did a lot of preparation,ā he said. āOur past returns have been strong. We had a set of existing LPs and we were pleased to have them back. And we brought in a few new investors.ā
Sterling Group was fortunate to win a berth among the group of sought-after funds that draw more demand from LPs than supply nowadays, Garland said.
The vintage 2010Ā Sterling Group Partners IIIĀ generated a 23.5 percent IRR as of December 31 for theĀ Wisconsin Investment Board, according to performance data compiled byĀ Bison. Other LPs in Fund III includeĀ Canada Pension Plan Investment BoardĀ andĀ Sacramento Private Equity Partners, an account for theĀ California Public Employeesā Retirement SystemĀ managed byĀ Oak Hill Capital Partners.
The team for Fund IV remains the same as Fund III, with six partners: Garland,Ā Gregory Elliott,Ā John Hawkins,Ā Brian Henry,Ā Gary RosenthalĀ andĀ Kent Wallace.
With $430 million more than the $820 million raised in Fund III, Sterlingās $1.25 billion Fund IV will keep deals about the same size, but it may end up closing more platform acquisitions in the newer fund. It will also have additional capital to support its portfolio companies with acquisitions or other transactions, a spokeswoman for the firm said.
Sterling Group typically targets companies with greater than $15 million in EBITDA in the manufacturing, distribution and industrial service sectors. It takes aim at corporate carve-outs, family-owned businesses, sponsor-backed companies and complicated transactions, according to the firmās website.
Among the firmās recent deals,Ā Safe Fleet, an Indiana-based maker of transit bus mirrors, made its fifth acquisition in the last 18 months with the carve-out of the mirror-making unit ofĀ HadleyĀ for an undisclosed sum. The deal was announced on July 1.
In May, Sterling Group completed the sale ofĀ B&G Crane ServiceĀ toĀ NCSG Crane & Heavy Haul CorpĀ for an undisclosed sum. Also in May, it closed the acquisition ofĀ Process BarronĀ from the founding family and management, who reinvested in the company as part of the deal. Financial terms were not disclosed.
All told, Sterling Group has closed 46 platform acquisitions and other deals for a total value of more than $10 billion since the firm was founded in 1982.
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