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Odyssey Investment Partners set to hit $2 bln hard cap on first close

Odyssey Investment Partners, a middle market-focused firm, has essentially hit its $2 billion hard cap for its fifth fund, according to documents from the Pennsylvania Public School Employees’ Retirement System.

PSERS committed up to $100 million to Odyssey’s fifth fund at the pension board’s recent meeting. A spokesperson for Odyssey declined to comment.

According to pension system documents, Fund V will be at its hard cap of $2 billion as of the fund’s first close on Dec. 16. The fund will stay open into January to allow for some last minute commitments from limited partners that need to make 2014 allocations, the documents said.

The general partner is expected to make a 3 percent commitment to the fund, according to a memo to the pension board from its alternative investment consultant, Portfolio Advisors.

Odyssey raised $1.5 billion for its fourth fund, a 2009 vintage. The firm’s track record is solid, according to pension documents. Fund IV was generating a net 1.6x multiple and a 23 percent net internal rate of return. Fund III, a 2005 vintage, was generating a net 2x multiple and a net 25 percent IRR. Fund II, a 1998 vintage, has a 2x net multiple and a net 15 percent IRR while the first fund, a 1991 vintage, scored a net 3.2x multiple and a net 45 percent IRR, according to PSERS.

The firm, formed by Stephen Berger, Muzzi Mirza, Paul Barnett, Brian Kwait and Bill Hopkins in 1998 (the principals worked at hedge fund Odyssey Partners prior to forming the fund), targets investments in “fundamentally sound but underdeveloped middle market companies” with earnings before interest, taxation, depreciation and amortization of $20 million to $100 million, according to Portfolio Advisors’ memo. The firm is managed by Berger, Kwait and Hopkins, according to Odyssey’s website.

Odyssey targets industrial and business services sectors such as aerospace, insurance services, safety and testing, automated equipment, industrial services, equipment rental, automated equipment and energy and packaging, according to PSERS.

Odyssey recently had some exit activity. The firm completed the sale of its portfolio company, One Call Care Management, to Apax Partners. Last month, the firm also agreed to sell portfolio company BarrierSafe Solutions International, which provides branded disposable gloves and injection molded protective footwear, to Ansell Limited.

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