Providence Equity launches Strategic Growth Fund: UPDATED

Providence Equity Partners, the media focused private equity firm, is out fundraising for a growth equity pool, according to three sources and an SEC filing.

Providence Strategic Growth Capital LP will invest in similar sectors as the firm’s flagship fund, one of the sources said. The fund will make smaller deals in communications, education and information services but not media, the source said. Strategic Growth will make mostly minority investments but will also do deals for control, the person said.

Mark Hastings, who joined Providence in 2013, will lead the team that is dedicated to strategic growth investments, the person said. The team will be based in Providence, Rhode Island, the source said.

The target for the Providence Strategic Growth Fund was not known. One LP noted that Providence launched a similar fund back during the dot-com boom of the late 1990s. Providence Growth Investors LP collected $276 million in 1999, according to alternative assets data provider Bison. Providence Growth Investors is producing a net IRR of 5 percent, the source said.

“This must mean we are near the top of the bubble,” the LP quipped.

Last year, Providence Equity closed its seventh flagship fund at $5 billion. The PE firm had reportedly hoped, in 2011, to raise $8 billion for Fund VII but cut that target to $6 billion and then reduced it further to $5 billion. Providence also needed a fundraising period extension to reach that target.

Benefit Street Partners, the credit investment arm of Providence Equity Partners, closed on $1.75 billion for Providence Debt Fund III in April, peHUB has reported.

Stacey Tramonti, a Providence spokeswoman, could not be reached immediately for comment.

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