Lariat Partners enters home stretch on debut $125 mln fund

Lariat Partners, whose founders came from KRG Capital Partners and RedCloud Capital, is nearing a final close for its debut fund, which has been targeting $125 million, according to two people with knowledge of the fund offering.

It is not clear exactly when the fund will close, but it could be in the first quarter, one of the people said. Lariat Partners filed marketing documents with the U.S. Securities and Exchange Commission in October, reporting it had collected about $28 million.

Executives at Lariat Partners did not respond to requests for comment by press-time.

One limited-partner-friendly aspect of Lariat’s debut fund is that the management fee is based on the management company’s budget, the person said. “They have given more thought than usual to both their fundraising and investment strategy.”

A budget-based management fee, as opposed to the industry standard 2 percent of committed capital in a fund, is something LPs like, but has not been widely adopted in the industry. Some first-time firms do offer budget-based fees as another incentive to bring investors into their funds. In the venture capital world, Mayfield Fund has long offered a budget-based management fee.

Co-founders Jay Coughlon and Kevin Mitchell formed Lariat Partners in January 2013. Coughlon was formerly a managing director at KRG Capital, and Mitchell was a managing partner at RedCloud.

Lariat Partners is targeting investments in specialty agriculture, energy and environmental services and healthcare services, according to the firm’s website.

The firm has made at least four investments, and this week agreed to its fifth, acquiring the environmental services division out of Newpark Resources. Lariat Partners plans to create Ecoserv, which provides environmental clean and waste services, by merging the Newpark division with  portfolio company Offshore Cleaning Systems.

Photo courtesy of Shutterstock.