SK Capital targets $1.4 bln with new flagship fund

  • Firm yet to set a hard cap
  • SK Capital raised $1 bln in 2014
  • Recent deal activity included carve-outs of chemical, pharmaceutical businesses

SK Capital is back on the market with a new fund targeting $1.4 billion, according to a limited partner with knowledge of the fund.

The firm hasn’t set a hard cap for SK Capital Partners V yet, the LP said, though it could raise as much $2 billion. SK Capital is also raising an overage fund alongside Fund V to provide additional capital in the event it pursues larger acquisitions.

SK Capital typically invests in companies that manufacture chemicals, pharmaceuticals or other specialty materials. It usually invests between $100 million and $200 million per deal, structuring its acquisitions as buyouts, recapitalizations or growth equity investments.

In March, New York State Teachers’ Retirement System committed up to $80 million to Fund V and up to $20 million to the overage fund, according to a recent investment disclosure. The commitments are expected to close in mid-May.

SK Capital closed its fourth flagship fund on a little more than $1 billion in late 2014, beating its target by $250 million and doubling the size of the $500 million it raised through Fund III.

“The increase in fund size doesn’t change anything,” Managing Director James Marden told Buyouts in 2014. “We are size agnostic with respect to deal size. We stay disciplined by sticking to what we know and targeting investments where there are a number of opportunities to improve growth or operations.”

Marden added: “The bigger fund allows us to participate in deals where [in the past] we didn’t have sufficient amount of capital to participate in.”

The firm’s recent investment activity involved carving assets from larger companies.

In March, SK Capital acquired the fire safety and oil additives business from Israel Chemicals, renaming the business Perimeter Solutions. The firm purchased a pharmaceutical ingredients business from Perrigo Company late last year, renaming the platform Wavelength Pharmaceuticals.

SK Capital declined comment.

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A pharmacist counts pills in a pharmacy in Toronto in this January 31, 2008 file photo. REUTERS/Mark Blinch/Files