Welsh, Carson, Anderson, Stowe Wraps Fund XI At $3.7B

Welsh, Carson, Anderson & Stowe has held a final close on its latest fund, securing pledges of $3.7 billion, according to a source familiar with the fundraising effort. The target for WCAS XI LP, which began marketing in 2007, was $3.5 billion, the source said.

The firm finished 95 percent of the effort in the fourth quarter of 2008 but had left the pool open until the end of May to accommodate a few stragglers, the source said. Originally, Welsh, Carson, Anderson & Stowe had discussed seeking between $4 billion and $5 billion for the pool with investors, according to the source.

The firm didn’t respond to a request for comment.

Limited partners include California Public Employees’ Retirement System, California State Teachers’ Retirement System, Canada Pension Plan, University of Missouri, and the New Jersey Division of Investment, according Thomson Reuters data. The firm held an initial close at $2.5 billion in June 2008 then disclosed an additional $600 million in pledges in September 2008. About $800 million worth of the pledges came from new investors, the source said.

WCAS XI is already being put to work. Its first investment was the July 2007 acquisition of a majority stake in PayCom, an Oklahoma City-based provider of online payroll services, in a deal worth $56 million. The only other transaction occurred in February 2009 when the firm bought a majority stake in GeoDigm Corp., a Chanhassen, Minn., maker of dental bridge, crown and implant products. The GeoDigm deal included an initial equity component of $40.3 million with the firm committing to provide a total of $100 million to support the company’s acquisition program.

Read the rest of this article at the web site for Buyouts magazine, where Michael Baron is a Managing Editor.