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WCAS returns to market with $3.75 bln fund

  • Welsh Carson closed previous fund on $3.3 bln in 2016
  • Fund XIII to pursue deals in healthcare, tech companies
  • Fund XII netting 20 pct IRR

Welsh, Carson, Anderson & Stowe is back on the market with its 13th fund targeting $3.75 billion, according to LP documents obtained by Buyouts.

As with its previous fund, WCAS plans to use the fund to pursue investments in technology and healthcare companies. Fund XIII’s portfolio is expected to include around 15 or 20 companies, according to the documents, which were released by the Minnesota State Board of Investment.

Minnesota State Board of Investment, which oversees the state’s $93.5 billion investment portfolio, committed up to $250 million to Fund XIII.

The firm will make a significant contribution to Fund XIII, with plans to commit the lesser of $200 million or 5 percent of the vehicle’s investable capital, according to the Minnesota documents.

Welsh Carson Anderson & Stowe raised the bulk of its previous fund in late 2014 and 2015, holding rolling closes until it wrapped fundraising on $3.3 billion in mid-2016.

That fund was netting a 20 percent internal rate of return and 1.3x multiple as of Dec. 31, 2017, according to Minnesota documents. Fund XI, a $3.9 billion 2009 vintage fund, was netting a 13 percent IRR and 1.6x multiple as of the same date.

The firm’s been very active over the last several years, typically deploying around $700 million in new investments annually, according to the Minnesota documents.

In April, the SEC slapped WCAS with an enforcement action for failing to tell its investors about payments it had received from a service provider. The firm agreed to pay around $779,000 in fees and penalties. WCAS did not admit or deny the SEC’s findings.

Welsh, Carson, Anderson & Stowe was founded in 1979 and has raised more than $22 billion since its inception. The firm has offices in New York and San Francisco.

The firm declined comment.

Action Item: Check out WCAS’s Form ADV here: https://bit.ly/2KeudYh

Correction: A prior version of this story said WCAS was back in the market with its eighth fund. That is incorrect. WCAS is marketing for its 13th fund. The story has been corrected.