The Sterling Group has held an oversubscribed and hard cap close of its fifth fund, Sterling Group Partners V LP, with $2 billion of capital. The new fund was raised after just four months of marketing.
According to Sterling, the majority of Fund V’s capital was committed to by returning investors but also included new limited partners from the United States, the Middle East and Asia.
“The Sterling team is grateful for the continued support of our long term investing partners, particularly in the midst of an extremely difficult market environment,” said Franny Jones, a managing director of Sterling. “The demand for Fund V is a result of Sterling’s hands-on, operational approach to transforming industrial businesses and our firm-wide commitment to continuous improvement in all aspects of our business.”
As with its prior funds, Fund V will primarily target corporate carve-outs and family businesses – nearly 80% of Sterling’s past investments have been made with these two types of sellers – that have enterprise values from $100 million to $750 million. Sectors of interest include manufacturing, industrial services, and distribution.
In December 2019, Sterling acquired Bad Boy, a maker of zero-turn riding lawn mowers. Bad Boy’s products are used in residential and commercial applications and are sold through both independent dealers and specialty outdoor retailers. The company has a total of more than 850,000 square feet of manufacturing facilities at multiple locations in Batesville, Arkansas.
Since its founding in 1982, Houston-based Sterling has sponsored the buyout of 56 platform companies and numerous add-on acquisitions with a total transaction value of over $17 billion. The firm’s partner group includes Greg Elliott, John Hawkins, Brian Henry, Scott MacLaren, Gary Rosenthal, Brad Staller, and Kent Wallace.
The firm’s earlier fund, Sterling Group Partners IV LP, closed in 2015 with $1.25 billion of capital commitments.
Sterling did not use a placement agent on the Fund V fundraise, and Kirkland & Ellis provided legal services.
Contacts in this article:
Write to Franny Jones at fjones@sterling-group.com.
Private Equity Professional | June 18, 2020
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