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Searchlight nears $1.8 bln final close on Fund II

  • Final close likely later this fall
  • Fund II raises $900 mln through July
  • Searchlight I nets 14.7 pct as of June 30

Searchlight Capital Partners expects to hold a final close on its $1.8 billion hard cap later this fall for its second fund, according to a public LP document.

In July, Searchlight Capital II held a first close on approximately $900 million in July, according to a memo from Portfolio Advisors included in Pennsylvania Public School Employees’ Retirement System meeting materials.

Fund II already surpassed the $860 million raised through the Searchlight’s debut, a 2012 vintage fund that netted a 14.7 percent internal rate of return and 1.3x multiple as of June 30, according to Pennsylvania documents.

Pennsylvania Public School Employee’s committed up to $100 million to the fund at its October 6 meeting. The commitment remains subject to final negotiations.

Emily Melchior, who handles investor relations for Searchlight, declined to comment. Park Hill Group is placement agent for the fund.

LPs have piled into Searchlight Capital II despite relatively few realizations from Fund I, which may make some investors uncomfortable, an LP said in July. The Fund I portfolio “is still very young,” having realized just $59.7 million for LPs as of August, according to Pennsylvania documents.

Even so, a memo from Pennsylvania investment staffer James Del Gaudionotes Searchlight was extremely selective in its investment process. Fund I’s average entry multiple was 6x, a 35 percent discount “relative to market,” Del Gaudio wrote. The firm also employs less leverage than other middle market firms.

Searchlight offers a dual-prong investment strategy that pursues both private equity and distressed investments across a wide range of industries, according to Pennsylvania documents and the firm’s website.

Oliver Haarmann, Erol Uzumeri and Eric Zinterhofer founded Searchlight in 2010. The firm has offices in New York, London and Toronto.

Action Item: Searchlight investor relations executive Emily Melchior can be reached at 212-293-3717.