GI Partners Eyes $1.5B For NorthAm-Only Fund

GI Partners is preliminary discussions with its investors about raising its fourth flagship buyout fund, Buyouts reported yesterday, citing a source familiar with the firm’s plans. The firm is likely to seek $1.5 billion for the fund.

Unlike GI Partners’ previous funds, which targeted deals in the U.S. and Europe, Fund IV will target deals only in North America, the source said, due to increased desire among limited partners to invest in different geographies on a fund-by-fund basis.

GI Partners has offices in Menlo Park, Chicago and Greenwich, Conn., as well as in London and Munich. The source said that the Europe team could eventually raise a Europe-focused GI Partners fund, though that has not been determined. There are 17 professionals in GI Partners’ Europe team, most of whom are based in London, according to the firm’s Web site. The firm has about 30 professionals in the U.S.

GI Partners Fund III LP, a $1.9 billion fund the firm closed in 2009, is 95 percent committed, a second source close to the firm told Buyouts. That fund was generating a 1.26x investment multiple and a 13.52 percent internal rate of return for the Oregon Public Employees’ Retirement Fund as of June 30. The pension had committed $200 million to the fund.

Meanwhile, GI Partners is busy with a pair of new discretionary funds it is managing for two major pensions.

In May, the California Public Employees’ Retirement System, a longtime backer of GI, announced the launch of TechCore, a $500 million real estate fund to be managed by GI, targeting data centers, corporate campuses and other technology-focused properties. And in August it was reported that the California State Teachers Retirement System had committed $250 million to the DataCore fund, which will pursue a similar strategy.

On Dec. 10, GI Partners announced its third exit since September, selling health care services provider Plum Healthcare Group LLC to Bay Bridge Capital Partners. Terms of the deal weren’t released, though GI Partners revealed that it made 3x its invested capital on the San Marcos, Calif.-based company, which it bought in 2006 via its second buyout fund, a 2005 vintage vehicle that raised $1.45 billion.

The news follows other recent exits for GI. In October, it sold a 75 percent stake in FlatIron Crossing, a Broomfield, Colo.-based shopping center, to real estate investment trust the Macerich Co. for $320 million, according to Capital IQ. And in September, GI sold PC Helps Support LLC, a Bala Cynwyd, Pa.-based provider of software support services, to a consortium led by Baird Capital Partners, a deal that GI announced returned 5x its invested capital.

Bernard Vaughan is a senior editor at Buyouts Magazine. Follow his tweets @BVaughanReuters. Follow Buyouts tweets @Buyouts.

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