Littlejohn talks to LPs about $1.5 bln Fund V

• Firm may close Fund V by year end

• Prior vehicle closed on $1.34 bln in 2010

• Firm targets middle-market companies undergoing change

Littlejohn did not return a request for comment.

The firm could launch its Fund V by the end of the year, or early next year, the person said.

Littlejohn closed its prior vehicle, Fund IV, on $1.34 billion in 2010, beating its $1.25 billion target. Fund III was closed in 2005 on $850 million. Fund IV was generating a 1.33x total value multiple and a 16.9 percent internal rate of return as of June 30, according to information from the Oregon Public Employees Retirement Fund.

LPs in Fund IV authorized Littlejohn to invest in non-control positions, as well as its traditional leveraged buyouts, according to a statement from the firm in 2010. The fourth fund was targeted to invest about 80 percent of its capital in control deals and the remainder in distressed opportunities with the intent to gain control. It’s not clear if Fund V will have similar flexibility.

The firm, founded by Angus Littlejohn and Michael Klein in 1996, invests in middle-market companies undergoing changes in capital structure, strategy, operations or growth.

Littlejohn completed its acquisition of wholesale hardware distributor Handy Hardware in August. The company emerged from Chapter 11 protection in July.

Chris Witkowsky is editor of peHUB