Leeds Equity Partners tops $400 mln for Fund VI

Leeds Equity Partners, buyer and builder of companies in the fields of education, training and information services, has closed on north of $400 million for its sixth core fund, Buyouts has learned.

Leeds Equity, which owns Buyouts, has passed the halfway mark towards its $750 million target for Leeds Equity Partners VI LP, according to a source familiar with the effort. The amount raised to date includes a $36 million GP commitment, the source said.

Returning LPs include Connecticut Retirement Plans and Trust Funds (which committed $50 million), Northwest Mutual Life Insurance Co and PPM America, while new investors include Partners Group and LGT Group, the source said.

Leeds Equity began talking with prior investors late last year and held a first close in the fall, the source said. Placement agents helping to market the fund include FocusPoint Private Capital Group, Milestones Capital and Hycroft, a division of North Sea Securities.

Altogether Leeds Equity has agreed to pay sales commissions on the fund of just over $4 million, according to a June 30 Form D filing with the SEC.

Leeds Equity tends to invest $50 million to $100 million of equity over the course of building its platform companies. The first portfolio company of Fund VI is Simplify Compliance, which the firm formed in December through the acquisition of four companies, including Argosy, publisher of online news and information services Buyouts, VCJ and The PE Hub Network. The combined company, which is expected to make additional acquisitions, provides news, data and training to help professionals in healthcare, human resources, financial services and other fields stay in compliance with state and federal laws.

The source expects Leeds Equity to announce its second platform deal later this week.

The performance of Leeds Equity’s prior fund appears to be solid. As of Sept. 30, the 2010 vintage Fund V, a $525 million pool, had generated a 16.8 percent net IRR for backer New Mexico Educational Retirement Board.

Altogether Leeds Equity, founded in 1993, has invested more than $1.2 billion in nearly 50 deals and about 30 platforms across what it calls the “knowledge sector.” The nine active portfolio companies listed on its website together employ more than 30,000 people and generate more than $4 billion of revenue.

Key executives on Fund VI include Jeffrey Leeds, president and co-founder of Leeds Equity. Prior to starting the firm he spent seven years working on M&A and corporate finance deals at Lazard Frères & Co. Fellow co-founder and Senior Managing Director Robert Bernstein worked with Leeds in the M&A department at Lazard. The firm has six managing directors altogether.

Update: This article has been updated to include information that Hycroft, a division of North Sea Securities, is working as a placement agent on the fundraising.

Action Item: Peruse Leeds Equity’s Fund VI Form D here: http://bit.ly/2unWEva