Crestview collects $2.4 bln on $3 bln Fund III target

Crestview Partners, the buyout firm founded by two Goldman Sachs private equity executives in 2004, is closing in on its $3 billion target, according to a person with knowledge of the fundraising.

The firm has raised about $2.4 billion so far, and could hold a final close on Fund III in the fall, the person said. Crestview Partners III has a $3.5 billion hard cap, the person said.

Crestview declined to comment.

Crestview launched Fund III late last year. The firm, founded by former Goldman private equity executives Barry Volpert and Tom Murphy, raised $2.4 billion for its 2009 vintage second fund, and about $1.5 billion for its debut fund, a 2005 vintage pool.

Fund II was generating a net 17.6 percent internal rate of return and a 1.5x investment multiple as of Dec. 31, 2013, according to performance information from the California Public Employees’ Retirement System.

Fund I was producing a gross 12 percent internal rate of return and a 1.9x multiple, according to the person with knowledge of the firm.

Crestview is usually one of the biggest investors in its own funds. The firm is kicking in about $200 million GP commitment to Fund III, the person said. The firm invested $150 million in Fund II and $100 million in the debut fund.

The firm’s limited partner base has become increasingly institutional as it has grown. Its debut fund was backed mostly by wealthy individuals, including legendary Bass Family investor Richard Rainwater. Crestview’s second fund included more of a mix of institutions and wealthy individuals, and Fund III will be more weighted toward the institutional side, the person said.

The firm has had some large exits. Crestview sold down its stake in cable operator Charter Communications over time, fully exiting the company earlier this year for a return of around 6x overall.

The firm sold its stake in Insight Communications after in 2012 for an about 2x return when Time Warner Cable took over the company.

Crestview also sold a portion of its stake in Camping World/Good Sam Enterprises, getting back almost its full equity investment. The firm still retains an interest in the company, for an implied overall return of almost 4x, the person said.

In January, Crestview closed its acquisition of NYDJ Apparel, whose products include Not Your Daughter’s Jeans. In November 2013, the firm bought Texoma Transportation & Crude Marketing, which provides crude oil purchasing, marketing and logistics.

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