Gryphon Investors collects $365 mln with second bridge fund

Gryphon Investors has completed fundraising for another bridge fund, sources said.

The San Francisco-based private equity firm has collected $365 million for Gryphon Partners 3.5 LP, the people said. That’s well above the $250 million the pool had been seeking, according to an SEC filing dated October 2012.

Marketing for Fund 3.5 began at the end of 2011 and was completed in September, sources said. That’s “a long haul for what was supposed to be an interim fund to a much larger vehicle,” said a placement source.

Gryphon, which targets middle-market companies, raised $415 million with its third buyout fund in 2006. In 2008, the firm deferred fundraising for Fund IV and instead collected $100 million with a bridge fund.

Sister publication Buyouts reported last November that Gryphon opted to do a second bridge fund instead of the larger fund IV, because firm executives didn’t want to be distracted from deals in a challenging fundraising environment. Marketing for Fund IV would likely have required several meetings a week for two or more years, which would tax the resources of a mid-size firm, Buyouts said at the time.

Fund 3.5 has a three-year investment period, rather than the six-year investment period typical for a larger fund.

Gryphon invests $25 million to $75 million in sectors such as business services, consumer products & services, general industries and healthcare. In March, Gryphon sold TrustHouse Services Group, a contract food service provider,  to French caterer, Elior. In the same month, Synteract, another Gryphon portfolio company, acquired Harrison Clinical Research.

Officials for Gryphon declined comment.

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