Oak Hill Capital Closes Third Fund

Oak Hill Capital Partners has closed its third fund with $3.8 billion in capital commitments, according to LBO Wire. The middle-market buyout firm began fundraising 18 months ago with a $4 billion target and $5.5 billion hard cap. Its second fund had closed in 2005 with $2.5 billion and had a 7.1% IRR as of year-end 2008, according to limited partner CalPERS.



A spokeswoman for the firm declined to comment.

The fund primarily will be used for value-oriented, risk adjusted, middle-market investments in six industry verticals: basic industries; business and financial services (including business process outsourcing); consumer products, retail and distribution; health care; media and telecommunications; and technology.

Fund II, a 2005 vintage fund, was generating a net internal rate of return of 7.3% and was 88.8% called down as of Dec. 31, according to an unnamed investor in the vehicle.

Fund III investors include California Public Employees’ Retirement System, Los Angeles Fire and Police Pensions, Oregon State Treasury, New Jersey State Investment Council, Montana Board of Investments, School Employees Retirement System of Ohio and San Francisco Employees’ Retirement System.

The general partner committed $500 million to Fund III.

Management fees are 1.75% of the committed capital for the duration