Lightyear Closes In On $800M Target

Lightyear Capital LLC, the financial services specialist founded by former Paine Webber Group Inc. CEO Don Marron, is closing in on its fundraising target for its third buyout fund, sister magazine Buyouts reported yesterday, citing a source close to the effort.

Lightyear, which has raised about $653.8 million from third parties, has some $700 million altogether including personal commitments from its executives, the source said. The firm is trying to raise $800 million, but will raise as much as $1.1 billion if there is enough demand. The fund placement group at UBS Securities LLC is helping the firm raise the money.

Marron launched Lightyear in 2000 after UBS bought Paine Webber; his firm is solely focused on buying companies in the financial services industry. In 2002, it raised $750 million for its debut fund, and followed that up with an $850 million second fund in 2007. The firm employs close to 20 investment professionals.

Lightyear appears to have made substantial progress with the fundraising since March, when Buyouts reported that it held a first close of $150 million. It hasn’t been an easy time to raise money. All U.S. buyout and mezzanine funds raised just $16.0 billion in the third quarter, a 42 percent slowdown from the $27.8 billion that was raised in the second quarter, according to data compiled by Buyouts. The third-quarter tally is also 36 percent less than the $24.1 billion that was raised in the same period of 2010.

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Bernard Vaughan is a Senior Editor at Buyouts Magazine. Follow his tweets @BVaughanReuters.