Irving Place to let Fund III LPs sell at full value or roll into new fund

Limited partners in Irving Place Capital’s $2.7 billion, 2006-vintage third fund have two options as part of the firm’s restructuring process, which is moving toward a conclusion this summer.

Existing LPs can cash out their interests in the fund at 100 percent of net asset value as of Sept. 30, 2014, according to documents seen by Buyouts.

Or, they can roll their interests into a new vehicle that will hold remaining investments from Fund III.

Rolling LPs will have “substantially similar” terms to what they already had, the documents said. The two co-managing partners of Irving Place, John Howard and Phil Carpenter, will continue to manage those assets.

Fund III had $1.1 billion of unrealized value as of Sept. 30, 2014, the documents said. The fund has 12 portfolio companies, including Bendon, an early development products company the firm acquired earlier this year. Other portfolio companies include Alpha Packaging, CAbi, Caribbean Financial Group, CH4 Energy, Chromalox, Mold-Rite Plastics, National Surgical Hospitals, Pet Supplies Plus, rag & bone, Universal Hospital Services and Ironshore.

The firm agreed to sell Ironshore, a commercial property and casualty insurer, earlier this year, though the deal has not yet closed.

LPs who roll their interests into the new vehicle are obligated to provide a small amount of capital for new investments, according to the documents and a person with knowledge of the transaction. Ultimately Irving Place expects to have $300 million for new investments (or follow-on commitments) as part of the restructuring, according to the documents.

Coller Capital is investing up to $500 million in the deal to buy out existing LP commitments and provide capital for new investments. It’s not clear if Coller is part of a larger investment group. The documents indicate the firm may look for additional investors to take part in the restructuring.

Irving Place said earlier this month in an SEC filing it had raised $500 million for Irving Place Capital Partners III SPV from one investor. That is the name of the fund being created to house existing Fund III investments as part of the restructuring, according to the documents.

Park Hill Group is running the restructuring process. Fund III LPs are responsible for paying Park Hill for its work on the restructuring, the documents said.

Alex Yankus, a spokesman for Irving Place, declined to comment.

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