Incline Equity markets $500 mln fund amid deal spree

  • Pittsburgh firm targets $500 mln; $550 mln hard cap
  • Interim close planned for late 2016
  • Incline Equity inks four deals since late September

PNC Bank spinout Incline Equity Partners is back on the market with its fourth flagship fund, targeting $500 million with a $550 million hard cap, documents released by Pennsylvania Public School Employees’ Retirement System showed.

The system committed as much as $100 million to Fund IV at its Oct. 7 meeting, pending final negotiation of terms and conditions.

Incline Equity expects to hold an interim close in the fourth quarter, a Portfolio Advisors memo said. The firm won’t collect management fees on Fund IV until it invests all of its $301 million third fund, a 2012 vintage. That’s likely to occur in early 2017.

Pennsylvania Public School’s $65 million commitment to Incline Equity Partners III was roughly 50 percent deployed as of June 30, retirement documents said, though it’s likely been drawn down significantly since then.

Incline Equity recently announced four deals. In early October, the firm acquired gutter and outdoor cleaning services company Ned Stevens. Less than a week later, Incline purchased Premium Franchise Brands, a franchiser of commercial and residential cleaning services.

The firm also announced add-on acquisitions for portfolio companies Double E Company and AFC Holdings in September.

Incline Equity declined comment.

The firm will use Fund IV to acquire lower-middle-market companies with enterprise values of $50 million to $200 million, a Pennsylvania Public School investment memo said.

Fund III was netting a 15.1 percent internal rate of return and 1.37x multiple as of June 30, according to Pennsylvania Public School documents. The firm notched its first exit from its third fund in July when it sold AmSpec Holding Corp to Olympus Partners. Terms weren’t disclosed.

Two previous funds, which were raised when the Incline team was part of PNC Bank, netted IRRs of 11.1 percent and 21.1 percent as of the same date.

Incline Equity Partners is based in Pittsburgh. The firm is led by Partners Jack Glover, Wali Bacdayan, Justin Bertram and Leon Rubinov.

Action Item: Incline Equity Partners:

Pittsburgh Pirates first baseman John Jaso (28) is congratulated by third-base coach Rick Sofield (41) after hitting a two-run home run off St. Louis Cardinals relief pitcher Jonathan Broxton (not pictured) at Busch Stadium in St. Louis on Oct. 2, 2016. Photo courtesy Jeff Curry-USA Today Sports/Reuters