Firms & Funds

Great Hill hits $1.5 bln hard cap on Fund VI in four months

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MIT
Sail boats sit on a dock at the MIT Sailing Pavilion on the Charles River in front of the Boston skyline on cold winter day in Cambridge, Massachusetts January 8, 2015. REUTERS/Brian Snyder
  • Hits hard cap in four months
  • Bulk of commitments from existing LPs
  • Fund VI slight increase over prior vehicle

For some firms in today’s fundraising environment, raising capital doesn’t seem to be much of a challenge.

Take Great Hill Partners: The Boston firm launched its sixth fund in September, around a year after raising Fund V, and just closed the vehicle on its $1.5 billion hard cap after only four months in market.

Great Hill raised Fund VI without a placement agent. The firm collected the bulk of capital, about $1.3 billion, from existing LPs, with the rest from new relationships, the firm said.

The LP base is about 45 percent pensions, 25 percent endowments and foundations and the rest insurers, family offices and others, the firm said.

Fund VI represents a 36 percent increase over the $1.1 billion the firm raised for Fund V, which closed in 2015 but began investing in 2014. Performance information on the fund was unavailable.

Great Hill closed Fund IV on $1.1 billion in 2009. That fund was generating an average internal rate of return of 23.85 percent and an average multiple of 1.64x as of Sept. 30, 2014, Buyouts previously reported. Updated performance information wasn’t immediately available.

An investment report from Alameda County Employees’ Retirement Association cited “fund track record” as a reason to commit to the fund. Alameda in January approved a $50 million commitment to Fund VI pending legal negotiations.

The Tennessee Consolidated Retirement System committed $100 million to Fund VI, according to Pensions & Investments.

Great Hill focuses on middle-market companies primarily in North America, investing in a range from $25 million to $100 million. The firm targets areas within the business services and consumer services sectors that “are significantly outpacing the U.S. economy and [include] companies with sustainable growth prospects,” its Form ADV says.

Last year, Great Hill promoted Nick Cayer, Rafael Cofiño and Peter Garran to partner. The managing-partner group is composed of Christopher Gaffney, Michael Kumin, Mark Taber, Matthew Vettel and senior adviser John Hayes.

The firm had about $2.7 billion of assets under management as of Dec. 31, 2015.

Action Item: Check out Great Hill’s Form ADV here: http://bit.ly/2kP2CUn

Sailboats sit on a dock at the MIT Sailing Pavilion on the Charles River in front of the Boston skyline on a cold day — January 8, 2015 — in Cambridge, Massachusetts. Photo courtesy Reuters/Brian Snyder