Lightyear’s Fund III Comes in Just Under $1B: UPDATED

Lightyear Capital has closed its third fund at $954 million, a placement source says.

The total is below the PE firm’s hard cap of $1.1 billion but more than Lightyear’s target of $800 million, the person says.

Buyouts, which reported the fundraising in October, says UBS Securities is the placement agent.

New York-based Lightyear focuses on middle market financial services firms in North America. In June, the PE firm agreed to buy the FIS Healthcare Benefit Solutions business from Fidelity National Information Services for $335 million. Lightyear, last year, acquired Clarion Partners, along with company management, in a deal valued at $100 million. Clarion is the former U.S.-based private market real estate investment manager of ING.

With fund III, Lightyear will seek to make 10 to 12 equity investments between $50 million and $100 million each, according to October 2011 documents from the Los Angeles Department of Fire and Police Pensions. LAFPP invested in Lightyear’s fund II and III.

Lightyear raised more than $850 million for its second fund in 2007.Lightyear’s debut fund raised $750 million in 2002. UPDATE: Lightyear’s fund II generated a net IRR of 3.4% as of March 31, an LAFPP spokesman says.

Lightyear is led by Chairman Donald Marron, who founded the PE firm in 2000. Marron is the former Chairman and CEO of Paine Webber Group, which was sold to UBS AG in 2000 for $10.8 billion.

Private Equity International reported the close of Lightyear’s Fund III at $954 million earlier Monday.

Officials for Lightyear did not return calls for comment.

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