Lovell Minnick raises $1.28 bln with fifth fund as firm reaches two decades old

What a way to celebrate a 20th anniversary.

After roughly a year in the market, Lovell Minnick Partners’ fifth fund closed on its $1.28 billion hard cap. Lovell Minnick Equity Partners V LP, which was oversubscribed, exceeded its $1 billion target, a statement said.

Fund V is nearly double Lovell’s last fund, which collected $750 million in 2015. In 2010, Lovell’s third pool raised $455 million.

Fund IV is producing a net IRR of 27 percent as of June 2019, a source said. Lovell Fund V has already deployed more than $400 million in deals, including platform investments in oneZero and Inside Real Estate plus other transactions under exclusivity, the person said.

Steve Pierson, a Lovell Minnick managing partner, said fundraising for Fund V was quick. The Radnor, Pennsylvania, private equity firm needed roughly a year to raise the pool, the person said. In fact, Lovell Minnick began marketing in late 2018, but held open the pool to include a high quality LP, the second source. Fund V also included a $25 million GP commit, the second source said.

“We are grateful for the strong support we received from existing investors, as well as confidence in our strategy from many new investors in the U.S. and abroad,” Pierson said.

Founded in 1999, Lovell Minnick will continue to focus on middle-market businesses in the Americas and Europe. The buyout shop typically invests between $40 million and $150 million equity in technology and business services companies within financial services.

Fund V is also the first for Lovell Minnick since its new tier of leaders took charge. In January 2018, the PE firm named Pierson and Robert Belke managing partners with day-to-day oversight of the firm.

Jeffrey Lovell and James Minnick, co-founders, continued as co-chairmen and co-chairs of Lovell Minnick’s board of managers. Lovell Minnick has never lost a partner, Pierson said. The firm now includes seven non-founding partners. “All of us were very involved in fundraising,” Pierson said.

Fund V is also more focused on European investors, the second source said. Lovell’s fourth pool had some European GPs but the amount raised from them was “immaterial,” the person said. More than $250 million of Fund V came out of Europe, the source said.

Lovell Minnick was known for its investment in asset managers but has expanded into business services, specialty finance, insurance and financial technology. Due to difficulties investing in the space, Fund V will likely not include any active traditional asset management deals, the source said.

Evercore Private Funds Group acted as placement agent for Lovell Fund V, while Kirkland & Ellis LLP was fund formation counsel.

Action Item: For more information, contact Pierson

Update: A prior version of this story said that Lovell Minnick has already invested more than $400 million of Fund V. The $400 million includes investments in oneZero and Inside Real Estate, plus other transactions that are under exclusivity. The story has been changed.