Vestar’s IV Hits the Street After Long Pre-Marketing –

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Following an extensive pre-marketing period to existing limited partners, Vestar Capital Partners began marketing its latest fund to potential new L.P.s in the last two months.

Vestar Capital Partners IV, L.P. features a $2 billion target and will require a minimum commitment of $10 million, according to a Securities and Exchange Commission filing dated July 7. Assuming a final close at exactly $2 billion, the firm will devote more than $1.96 billion of the capital garnered to buyouts. The balance of those proceeds will be split between $30 million in management fees, $5 million in working capital and $1.25 million for various operating expenses, according to the filing.

As with Fund III, The Monument Group of Boston will serve as placement agent.

The firm’s existing L.P.s received the benefit of extensive pre-marketing and have responded with strong interest to this point, said a source familiar with the fund raising.

Vestar actually had begun discussing raising the vehicle with its limited partners at the beginning of the year, although at the time sources at the firm denied that a target had been set or that pre-marketing had begun (BUYOUTS Jan. 11, p. 3).

Other than indicating that efforts seem to be proceeding quickly, the source could not provide timing for a first close or indicate how strictly the $2 billion target will be held to in the event it is oversubscribed.

Limited partners in previous Vestar funds have included Fleet Equity Partners, Hancock Venture Partners, Harvard Private Capital Group, IBM Retirement Fund, Illinois State University Retirement System, Iowa Public Employees’ Retirement System, Los Angeles County Employees’ Retirement Association, Nassau Capital LLC, Nevada Public Employees’ Retirement System, New Mexico State Investment Council, Pantheon Ventures, Rockefeller Foundation, San Francisco City & County Employees’ Retirement System, US West Inc. and Virginia Retirement System.

Vestar closed its $803 million Fund III in the first quarter of 1997 (BUYOUTS, April 7, 1997, p. 4).