KPS Capital Partners hit the $3.5bn hard cap for its Special Situations Fund IV vehicle on Friday, the third time it has run an oversubscribed fundraise.
That fundraise was invariably boosted by the impressive performance of its third special situations fund, which had an IRR of 20.6 per cent and 1.6 times cash multiple at the end of September 2012 according to fund investor CalPERS.
The standout deals from that 2007-vintage fund was the nine-times return made on the turnaround of North American Breweries, which it sold to CerveceriaCostaRica for $388m in November 2012.
Several weeks earlier it had made a 10-times return exiting vehicle parts supplier HHI Group, which it created in 2005.
KPS said it would wait until Fund III was fully invested before deploying capital from the new vehicle.
When it does begin investing Fund IV will continue KPS’ strategy of targeting control investments in corporate carve-outs, turnarounds, restructurings, bankruptcies and other special situations.
A statement from KPS co-founders Michael Psaros and David Shapiro said, “We are humbled by the demand from the global investment community for KPS Fund IV and we are very grateful for the support of a group of prestigious investors from North America, Europe, Asia and Australia.
“We believe that the demand for the fund reflects our ability, over decades and across economic cycles, to add real value as a general partner by seeing value where other investors do not, buying right and making businesses better.
“We believe our success is the result of our operations focused investment strategy, the long term continuity of our partnership and the strength of our core investment team.”
The firm’s most recent non-fundraising activity was the recapitalisation of portfolio company Waupaca Foundry which saw it pay out a $200m cash distribution to stockholders in February.
A month earlier it recapitalised Waterford, Wedgwood and Royal Doulton holding company WWRD to raise $167.5m, which were used to pay stockholders $50m, refinance existing debt and support the company’s existing growth.
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