LLR Fund V first close set for year-end

  • New fund targeting $950 mln, $1.1 bln hard cap
  • Pennsylvania Public School Employees’ re-ups $200 mln
  • Firm nets aggregate IRR of 16.8 pct on prior funds

LLR Partners is poised to hold a first close on its fifth flagship fund this month, with a final close planned for the second quarter, according to a Portfolio Advisors memo published in Pennsylvania Public School Employees’ Retirement System meeting materials.

The firm set a $950 million target with a $1.1 billion hard cap on Fund V, the memo shows. The general partnership group will commit at least $30 million, or 3 percent, of Fund V’s total commitments.

LLR declined comment.

PSERS committed as much as $200 million to LLR Equity Partners V at its Dec. 7 meeting, the retirement system’s website says. The $50.2 billion public pension is a longtime investor in LLR funds, having committed $525 million across each of the Philadelphia firm’s prior flagship funds.

Those commitments delivered PSERS an aggregate net internal rate of return of 16.8 percent and a 1.6x multiple, according to a retirement system memo.

LLR’s fifth flagship will continue to invest in lower-middle-market companies with less than $100 million of revenue, the Portfolio Advisors report says. On its website, LLR lists business services, education, financial services, healthcare, security and software as areas of expertise.

“In LLR’s view, lower-middle-market companies tend to have stronger growth prospects than larger businesses and may present more opportunities for LLR to add value through strategic, operational and talent enhancements as well as exit planning,” PSERS staff wrote in a memo. The memo also said entry multiples for these businesses tend to be more attractive than with larger companies.

LLR was founded in 1999 and has raised more than $2 billion since its inception.

Action Item: For more information on LLR Partners, visit www.llrpartners.com

The Liberty Bell is seen in Philadelphia on Feb. 12, 2015. Photo courtesy Reuters/Charles Mostoller