Huntsman Gay Delays Fundraising Until Next Year

Huntsman Gay Global Capital will be focusing on exits this year and will likely not be fundraising until 2013, a source says.

The Palo Alto, California-based PE firm has completed 21 deals in three years and one exit (that was Grand Isle Shipyard which was sold to Nana Development Corp. in 2011). Huntsman Gay will be “looking to demonstrate value” before raising a new fund,” the person says. The new pool will likely be roughly the same size as the first, the source says.

Huntsman Gay, which invests predominately in tech companies, was expected to fundraise this year for its second fund. In 2009, the PE firm raised $1.1 billion with Huntsman Gay Capital Partners Fund LP. The fund is about 70% invested, one person says. Huntsman Gay Capital Partners Fund LP has a net IRR of 7.7%, according to Sept. 30 data from CalPERS.

Huntsman’s LPs “want things to jell more before committing,” a placement source says.

Last month, Huntsman Gay confirmed that Robert Gay, who co-founded the firm, was leaving the PE firm to work full-time for the Church of Jesus Christ of Latter-day Saints. The PE firm recently laid off some positions among its administrative staff, including Donald Miller, head of portfolio management; Judy Frodigh, chief administrative officer; and, Benjamin Thorndike, director of IR. The firm is also shutting down the Boston office, sources say. However, the size of Huntsman’s deal staff hasn’t changed, one person says.

Term Sheet, which reported the layoffs last week, said that Gay’s departure appears to be a much bigger deal than the firm anticipated a month ago. One bright spot for Huntsman could be Hybris Software. The provider of ecommerce software for manufacturers and retailers is expected to go public later this year or early 2013, and is currently looking to sell a stake in the company. Potential buyers could include Silver Lake Partners, Francisco Partners, Insight Venture Partners, or Technology Crossover Ventures.

Officials for Huntsman declined comment.

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