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CapStreet Group raises cap on Fund IV to accommodate last minute LP

We wrote a few weeks back that The CapStreet Group had closed its fourth fund on its hard cap of $325 million after about three to four months in the market, according to the firm’s chairman and chief executive George Kelly.

I was surprised last week after spotting an official press release showing the firm had closed Fund IV on $340 million. How to explain the discrepancy, especially considering Kelly confirmed the smaller amount?

As it turns out, CapStreet held the fund open for a last minute, existing limited partner from the prior fund that wanted a piece of CapStreet IV LP. In fact, CapStreet got approval from LPs to increase the cap to make room for the last minute LP, Kelly told me Tuesday.

“There will be no more changes, and the total amount raised was $340 million,” he wrote in an email Tuesday.

CapStreet IV LP has not yet been activated and will not call its first capital until possibly the third quarter, Kelly said. The firm will not begin collecting management fees on the fund until it begins investing, he said.

As a reminder, CapStreet targets lower middle market companies with enterprise values of less than $150 million. The firm, based in Houston, was formed in 1990. CapStreet closed its third fund on $178 million in 2010.

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