Cressey & Co seeks wider deals range with new $615 million fund

Peter Ehrich, partner at Cressey & Co, said the firm will have the option to pursue a wider range of targets because of the bigger size of Fund V.

“The larger fund will allow us to do a couple of deals that we wouldn’t have done because they were too large,” Ehrich said. “We’ll continue to do co-investments but we may not need to do as much since we have a bigger checkbook.”

He sees no reason to waver from Cressey & Co’s steady pace of one to three platform deals per year with enterprise values ranging from $50 million to $300 million. Ehrich said Cressey & Co continues to sift for similar deals as Fund IV, which closed in 2010.

“We’ll continue investing in and building leading provider, service and information technology businesses in the North American healthcare industry,” he said. “Hospice and home health are two of a number of attractive areas in Cressey’s sandbox of healthcare provider businesses.”

Officially launched in July, Cressey & Co Fund V initially targeted $400 million. In a sign of strong demand from LPs, Fund V held a single close at its hard cap of $615 million. The GP, which includes the partners and other Cressey & Co staff, committed $65 million.

Cressey & Co added some new LPs to the fund, including public pension investors, insurance companies and some fund-of-funds.

Cressey & Co increased its overall investment staff to 15 people from 11 during the course of Fund IV, but the firm’s senior leadership is unchanged. Six partners: Merrick Axel, Bryan Cressey, Ralph Davis, Peter Ehrich, Sen. Bill Frist and David Schuppan all remain at the helm of the Chicago and Nashville-based firm as it looks toward 2015 and beyond.