Trivest breezes to $600 mln dry close on sixth fund

Firm: Trivest Partners

Fund: Trivest Fund VI

Target: $550 mln to $600 mln

Amount Raised: $600 mln

Placement Agent: Shannon Advisors LLC

Trivest Partners, the Coral Gables, Fla.-based firm that has become one of the country’s most prolific buyers of family-owned businesses, has quickly secured $600 million for its sixth core fund.

Troy Templeton, managing partner, said the firm began reaching out to prior investors this summer. Trivest had just passed the 75 percent invested mark on its $415 million, vintage-2013 fund after its purchase of Nashville, Tenn.-based NovaCopy, a provider of print and IT services. Templeton had been thinking of raising a fund in the $550 million to $600 million range; investors were ready to commit more than $1 billion; and Trivest ended up holding a dry close of $600 million on September 8. Shannon Advisors LLC helped with marketing as the placement agent.

Templeton declined to discuss backers, except to say that the Trivest partners themselves contributed a “substantial dollar amount.” However, a source familiar with the effort said the firm drew commitments from a number of large institutional investors, including Adams Street Partners, AlpInvest Partners, DuPont, GCM Grosvenor, MetLife Inc., Prudential Financial, RCP Advisors and State Farm Insurance Co. 

Templeton attributed the successful fundraising in part to the strong fundraising market and in part to the firm’s “excellent returns,” along with other factors. In the last two years, he said, the firm sold five companies from Funds IV and V. Those five generated almost $500 million in proceeds, returning an average of close to six times invested capital. He said he’s been told by investors that consulting firm Cambridge Associates ranks all three of its prior funds, including the $325 million Fund IV (2008) and the $315 million Fund III (2001), as top-quartile in performance.

Trivest has been investing at a rapid clip of late, closing 35 transactions in the last 32 months, including 12 deals this year. NovaCopy became the 15th platform company of Fund V this summer. Templeton expects to launch two or three more before beginning to invest Fund VI, probably some time in early 2018. (Until then the firm does not plan to draw fees on Fund VI.)

To keep its deal engine humming the firm roughly doubled the size of its staff over the past four years, to some 22 people, adding analysts, associates and vice presidents. It plans to continue to hire additional staff at the junior level.

The firm targets family-owned companies generating $5 million to $20 million of EBITDA in four main markets: business services, consumer products, niche manufacturing and value-added distribution. The firm is known for a business development team that calls on thousands of business owners, business brokers, and other sources of deals each year to try to capture deals that aren’t widely shopped.

“We try to find the deal, rather than the deal finding us,” said Templeton. The firm also taps the talent of a network of some 200 CEOs–the Trivest Executive Network–on call to pitch in on deal sourcing, due diligence and operations post-closing.

Along with its core fund, Trivest manages a $225 million non-control investment fund that it closed last year. The firm closed the third deal from that fund this week.

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Photo: A beachgoer photographs the waves as a band of Hurricane Matthew arrives in Daytona Beach, Florida, U.S. October 6, 2016. REUTERS/Phelan Ebenhack