Shamrock Partners Take Control While Third Fund Comes In at $400 Mln–UPDATED

For Shamrock Capital Advisors, fundraising for its third pool was a rather quick affair.

The Los Angeles PE firm spent roughly eight months marketing for Shamrock Capital Growth Fund III L.P. which just raised $400 million. By comparison, Shamrock spent a year fundraising for its second pool, which came in with $311.5 million in 2006, says managing partner Stephen Royer.

Fundraising has been tough for several firms and many are taking longer to finish. Shamrock actually began marketing for fund III late last year and most of the money was lined up by April, Royer says. A final close didn’t occur until last week, he says.

“It was substantially quicker this time around,” Royer says.

Why were things faster this time around? Shamrock’s first pool, which raised $170 million in 2001, was a friends and family fund. The firm’s second fund was the first time Shamrock introduced itself to the institutional community. “Fund II looked like a first time raise,” he says. “Our track record has been quite good and that made things quite easier.”

Royer wouldn’t disclose IRR’s for Fund II. Shamrock Capital Growth Fund II LP has a net IRR of 18.7%, according to Sept. 30 data from Regents of the University of California alternative investments.

“[Fund II] is a really nice performing fund relative to its peer group and on a gross basis,” Royer says. “It’s still relatively early.”

Shamrock, a lower middle market firm, focuses on media, entertainment and communications. It typically invests from $15 million to $75 million per deal. UPDATE: With the close of fund III, Shamrock promoted Michael LaSalle and Andy Howard to partners. But the PE firm did not use a placement agent for its third pool.  “We had a lot of interest early on and didn’t need to use one,” he says.

Nearly 35 years ago, Shamrock was founded  as the investment firm of the Roy E. Disney family. Last year, Shamrock finally split with the Disney family when partners of the PE firm acquired a majority stake. The family retains a minority, Royer says. Shamrock also moved offices to Westwood from its previous Burbank locale. “We’re investing in emerging media companies and there is a lot more of that in West L.A.,” Royer says. “Burbank is more media conglomerates.”

Notable deals for Shamrock include REALD Inc, a 3D movie company that went public last year. Shamrock invested $50 million in 2007. The PE firm fully exited in 2010 and reportedly tripled its money. Shamrock also owned Modern Luxury, a regional luxury magazine, that it sold to Clarity Partners in 2007 for a reported $250 million. (Shamrock invested $50 million in 2004.)  Modern Luxury then went belly up before being sold to the Dickey Family last year for a fraction of  what Clarity paid, or about $20 to $25 million. (Shamrock was out of the deal by this time.)

Surprisingly, most LPs are bullish on the media space, Royer says. Along with energy and healthcare, LPs want to get exposure to these sectors via sector-focused funds as opposed to generalists. “We believe that there will continue to be tremendous change in the media and communications space over the next few years, and, where there is change, there is opportunity,” he says.