Milestone Raising Third Fund

Milestone Partners is raising its third fund, according to a regulatory filing. The Pennsylvania-based lower middle market PE firm has a target of $240 million, which is double the size of its last fund (raised in 2004). According to the filing, dated April 7, 2008, Milestone Partners III LP had accumulated $103.1 million in commitments from 38 investors.
This is Milestone’s second time raising money from institutional investors. Lead investors in its second fund included Pennsylvania Public School Employees’ Retirement System (PSERS) and Parish Capital Advisors. Its prior fund was $88 million.

Already the firm has purchased three companies out of its new fund. Milestone bought Fatz Café, Safemark Systems and Global Connection of America in June of this year. Its deal for Safemark Systems (announced last week) used a debt facility and co-invest from Madison Capital and New Canaan Funding.

Partner Brook Hayes declined to comment. According to the firm’s Web site, Milestone makes “control equity investments of $5 to $25 million in manufacturing, distribution and service companies with valuations of up to $100 million.” Its portfolio companies are as disparate as apparel makers, performance enhancement product sales, auto parts makers, natural foods products and pizza restaurants.Milestone formed in 1995.