Deerfield, Ill.-based private equity firm Pfingsten Partners has closed its fourth fund with capital commitments of $525 million. The firm will continue investing in middle-market manufacturing, distribution and business service companies.
Institutional investors account for 83% of Pfingsten Partners Fund IV’s commitments, while high net-worth individuals, families and Pfingsten professionals made up the balance. Approximately 20% of Fund IV capital commitments came from overseas investors.
Fund IV will boast a diversified portfolio of approximately 20 platform investments, with transaction values between $15 million and $100 million. Although it is the firm's largest fund in its 19-year history, the firm will not target larger acquisitions than it has in the past.
“The value we bring to middle market companies lies in our ability to take a company from its entrepreneurial roots to a professionally managed business," said James Norton, senior managing director. “Sticking to the lower end of the middle market enables us to build better businesses and maximize returns for our investors.”
The firm views the current M&A environment as an opportune time to invest capital. “We finance the acquisition of every platform company with at least 50% equity, which enables us to complete transactions, even in today's tight credit markets,” said John Underwood, senior managing director. “We are in an excellent position to round out Fund III and activate Fund IV.”