Huntsman Gay Raises $1.1 Billion for Debut Fund

Huntsman Gay Global Capital today will announce that it has closed its debut fund with more than $1.1 billion in capital commitments. The mid-market buyout shop effectively finished fundraising months ago, but delayed its final close to accommodate a handful of stragglers.

Major limited partners include CalPERS, CalSTRS, AlpInvest, C.V. Starr & Co. and GIC. The firm’s partners also put up more than 10 percent.

“Getting fundraising finished removes a bit of a distraction for us, and now we can completely turn 100% of our attention to deals,” says Steve Young, the former NFL quartback who is one of Huntsman Gay’s nine managing directors. “We did a deal late last year [buying lifting and transport company Turner Bros. from Saw Mill Capital] and intend to close two more in the next couple of quarters.” 

Huntsman Gay’s investment strategy is to write equity checks of between $50 million and $100 million, to acquire mid-market companies with at least $20 million in EBITDA.

Perhaps more interesting, however, is what will happen to some of Huntsman Gay’s profits, once those investments are exited. Both of the firm’s namesake managing directors — Bob Gay (ex-Bain Capital) and Jon Huntsman (founder of chemical giant Huntsman Corp.) — will donate 100% of their carried interest to philanthropic organizations. Much of Gay’s take will go toward Unitas, a global micro-finance organization he founded, while Huntsman will be donating to his eponymous Huntsman Cancer Institute.

Young says that some of the other Huntsman Gay partners also will donate portions of their carry to other organizations, although he declined to get into specifics (I’d assume that some of his will go to the Forever Young Foundation).

It’s important to note, however, that Huntsman Gay is not a “social capital” firm. Instead, it’s investment decisions will be aimed at generating the highest-possible returns.

“This is an exciting time to be doing middle-market private equity, because assets are so attrractively priced,” says Gary Crittenden, the former Citigroup CFO who joined Huntsman Gay last week. “We have no legacy issues to deal with, and I think the world of the team that’s been put together.”