New York-based private equity firm Arsenal Capital Partners has raised $875m for its third fund, topping its $750m target.
Arsenal has already made four investments totalling $195m, making the fund just over 20 per cent committed.
The size of the fund marks a significant increase from its previous $500m vehicle and takes the firm’s committed capital under management to $1.6bn.
Arsenal looks to invest between $50 and $250m in lower middle market businesses based in the US. Last year the firm made eight investments, while exiting its stake in Novolyte to BASF and recapitalising Charter Brokerage.
Half of the instructional LPs that backed the fund are in the US with the rest based in Europe and Asia.
The investors include PKA, Northwestern Mutual Life Insurance, PPM America, Northeast Utilities Service Company Retirement Plan, KIRKB, Storebrand, Purdue University, Bowmark Capital and Cheyenne Capital Fund.
Arsenal addressed the issue of the tough fundraising markets, saying it was “gratified by the investors’ response, citing the institutional quality of our firm committed to the opportunities and needs of the lower middle market.”
Jeffrey Kovach, Arsenal co-founder and partner, said, “With offices in New York and Shanghai and a global team, our international experience and capabilities are a major differentiator in the marketplace.
“The Arsenal strategy and model continue to win in the market, as evidenced by the 57 investments we have completed since inception.”
Earlier this year Arsenal backed its portfolio company WIRB-Copernicus Group’s acquisition of software developer Research Dataware and made a majority investment in TractManager, a provider of compliance and business process improvement services.
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