KPS’ “Hot” Fund IV Seeks $3 B

KPS Capital Partners is out fundraising for its next pool, which has a $3 billion target, three sources say.

The fund is so hot that it has generated $9 billion worth of interest, source says. KPS is doing a “first and final” for the pool, a different source says.

“They’re definitely a fund people want,” the source says.

KPS is not using a placement agent.

New York-based KPS, a special situations investor, raised $2 billion with its last pool in 2009. KPS Special Situations Fund III originally closed at $1.2 billion in 2007, but the firm ended up raising $800 million in additional capital that brought total commitments to $2 billion. The pool is generating a net IRR of 19.3%, according to June 30 data from CalPERS. The firm’s second fund collected $404 million in 2004. Performance data was unavailable for fund II.

KPS typically invests from $50 million to $300 million per deal. The firm scored three exits in 2012. KPS, in December, completed its sale of North American Breweries Holdings to Cervecerίa Costa Rica, a unit of Florida Ice and Farm Co., for $388 million. KPS earned a return of more than 9x invested capital on the sale, Reuters has reported.

In October, KPS also sold HHI Group Holdings to American Securities and offloaded Bristol Compressors International to Garrison Investment last January.

Several KPS portfolio companies have also issued distributions recently. This month, WWRD Holdings paid out $50 million to shareholders, while Global Brass and Copper made a $160 million distribution in June and HHI Group, before it was sold, issued a $70 million distribution to shareholders in March.

Officials for KPS did not return calls for comment.