Court Square Seeks $1 Bln First Close for Fund III in April

Next month, Court Square Capital Partners plans to hit a first close of $1 billion for its third fund, an LP says.

The former Citigroup Venture Capital Equity Partners is currently out marketing for the pool, Court Square Capital Partners III LP. The New York PE firm notified LPs at its annual meeting in September of the planned fundraising, the person says. A PPM with $3 billion on the cover was sent out in November, the source says.

A final close for the third fund is expected in September, the source says.

Despite the tough fundraising market, LPs are very enthusiastic about Court Square’s new pool. The Minnesota State Board of Investment has already committed $175 million to the fund.

“The day I was there, there was probably three other prospective LPs there,” the source says. “[Court Square’s] been very busy.”

Court Square Capital was formed in 2006 by former members of Citigroup Venture Capital Equity Partners, including Bill Comfort. The PE firm invests in sectors such as building products, business services, consumer products as well as telecom & technology. In January, peHUB reported that Rocket Software, a Court Square portfolio company, was paying a $260 million dividend to shareholders.

Court Square’s prior fund raised $3.1 billion in 2007. The pool has had minimal realizations but the portfolio looks good, the LP says. “Everything was marked at par or better with good prospects,” the source says. Fund II has a net IRR of 10.4%, according to June 30 data from CalPERS.

Officials for Court Square declined to comment.