Hellman & Friedman said it has raised just about $10 billion for its eighth flagship buyout fund as the San Francisco generalist firm turns away some investor dollars as it nears its hard cap, according to an investor in the fund.
(Editor: The filing confirms an earlier peHUB report that revealed Fund VIII would be a lightning quick mega fundraising.)
Hellman & Friedman disclosed $9.97 billion in sales for the fund, with a date of first sale of Sept. 24, 2014, according to a Form D document filed on Sept. 29. No placement agent or fund target appears on the form, which lists Arrie Park, David Tunnell and Philip Hammarskjold as key executives. All three are managing directors of the firm, according to its website.
[contextly_sidebar id=”SGwSlx7Y89EIHx2Q6737GfpY3DZm9ArF”]”People are clamoring to get allocations and it’s amazing there have been some cutbacks given the fund size,” one LP in the fund told peHUB sister publication Buyouts. ”Everyone is herding toward managers deemed to be the highest quality.”
The LP said it moved “fast and early” to get into Hellman & Friedman Capital Partners VIII LP, which may be attracting individual check sizes of $300 million or more, the source said.
Rather than blowout deals in niche sectors, Hellman & Friedman practices a “know it when they see it” ability to spot good deals of many stripes, the LP said. The firm’s focus includes software, Internet, digital and traditional media; financial services; insurance; business, marketing and information services; energy and industrials; and healthcare, according to its website. Its target investment size is $300 million to $1 billion of equity in companies based in developed markets including the United States and Europe.
“They’ve always been a group that’s been hard to figure out,” the source said. ”They don’t have a consistent thread other than making good returns.”
Hellman & Friedman expected to hold a first close in September for the fund, according to an investment memo prepared by staff for the San Francisco Employees’ Retirement System, which pledged $50 million in September, according to an Aug. 15 Buyouts article. The GP planned to contribute $450 million, with a final close expected in October.
Buyouts reported back in April that Hellman & Friedman started seeking commitments for a buyout fund of comparable size to the more than $8.8 billion taken in for Hellman & Friedman Capital Partners VII LP. Fund VIII has already surpassed that.
The vintage 2005 Hellman & Friedman Capital Partners V LP had generated an IRR of 28.22 percent as of Dec. 31 for the Washington State Investment Board, according to public fund performance data compiled by Buyouts.
A spokeswoman for Hellman & Friedman declined to comment.
Hellman & Friedman has earned a place among mega-funds in favor with LPs, along with ones from Blackstone Group and Apollo Global Management, the LP said.
Blackstone Group is moving into the fundraising market with a $16 billion target for Blackstone Capital Partners VII LP and $8 billion for its second Tactical Opportunities Fund. Meanwhile, TPG Capital is launching efforts around TPG Partners VII LP with an eye on $8 billion to $10 billion in commitments.
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