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Palladium raises hard cap for $1.14bn Fund IV final close

22 Apr 2014

america2_lrgPalladium Equity Partners has easily beaten its target for its fourth fund aimed at the fast-growing US Hispanic market by holding a $1.14bn final close.

The firm was hoping to pull in $800m for the vehicle, which would have seen it surpass the $775m it gathered for its third fund in 2005.

But strong support from LPs across Europe and the Americas helped it soar past that target as well as the $1bn hard cap, which investors in the vehicle agreed to raise.

AltAssets revealed in January that Palladium Equity Partners IV had picked up a $100m commitment from the Los Angeles County Employees Retirement Association, the latest in a series of pledges from high-profile US pension funds.

The New York State Common Retirement Fund had already committed $170m, with another $60m coming from US pension fund giant CalSTRS.

Those commitments had helped Palladium near the halfway point for the fundraise in May last year.

Palladium said PEP IV would continue its strategy of investing in lower mid-market businesses, particularly founder-owned enterprises.

The firm invests between $15m and $75m in businesses with EBITDA of between $5m and $25m.

Last summer Palladium returned $58m to investors in its third fund by recapitalising portfolio companies ABRA Auto Body & Glass and Teasdale Quality Foods.

Palladium’s recap of vehicle damage repair service ABRA saw it return about $24m, or 44 per cent of invested capital, to LPs, while the $34m payback from Teasdale represented a 1.1-times return in less than two years.

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