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Pre-Marketed Funds “Officially” Enter Market

Judging by anecdotal evidence and dismal Q3 numbers, not too many buyout firms are testing the fundraising market these days. But according to sources, there are a few brave souls out gathering investor commitments, and they have one thing in common. Firms that spent time pre-marketing their fund are finding the time right to officially enter fundraising mode. “Anyone that’s coming to market now has technically been in the market for a long time,” a fundraising source said.

Mid-market firms Mason Wells, and Riverside Partners officially begun fundraising after several or more months of “testing the waters” and rounding up soft commitments from investors, peHUB has learned.

Mason Wells, based in Milwaukee, had been “beating the trees” with word of their third fund for more than a year before “officially” coming to market two to three weeks ago, a source said. The firm seeks to raise $250 million with a $300 million hard cap, planning a first close in the first quarter of 2010. In 2006, Mason Wells topped its $250 million target with a $300 million fundraise to invest in engineered products and services,

specialty packaging and paper and outsourcing businesses in the upper Midwest. The firm used Forum Capital as a placement agent for that effort. Mason Wells did not return calls by press time.

Riverside Partners pre-marketed its fourth fund for almost a year before entering the market four months ago. As of July, the firm was nearing a first close on Riverside Fund IV, which has a $250 million target, a slight increase from the firm’s $225 million third fund from 2006. The firm specializes in investments in the health care and technology sectors in companies with annual revenue of between $10 million and $100 million. Riverside Partners did not comment on a prior story highlighting the firm’s fundraising efforts.