AE Industrial closes first fund on $680m

The firm also raised three co-investment vehicles totaling $160m, with one in partnership with Carlyle and Blackstone’s GSO.

AE Industrial Partners has closed its first fund on $680 million, surpassing its $600 million target, the firm said.

According to PEI Research & Analytics, AE Industrial Partners Fund I had a hard-cap of $700 million and held a first close in June on $270 million.

A source with knowledge of the matter told Private Equity International that the fund has been in the market since October 2014.

The source said AE Industrials also raised $160 million for three different co-investment vehicles. One of those vehicles was established to co-invest in Global Jet Capital alongside The Carlyle Group and Blackstone’s GSO Capital Partners in October 2014. Carlyle and GSO own a majority stake and AE Industrial a minority stake in Global Jet Capital, the source said.

The fund received equity commitments from institutional investors such as public and private pension plans, endowments, alternative asset managers, family offices and aerospace executives, AE Industrial said.

According to PEI Research, New Mexico Educational Retirement Board committed $50 million to the fund. The firm’s filing with the US Securities and Exchange Commission earlier this month indicated that there are 28 investors in the fund.

Stifel’s Eaton Partners was the placement agent, and Gibson Dunn & Crutcher was the legal counsel.

The fund has recently invested in engineering supplier Belcan Corporation and airlines supplier Kellstrom Materials, along with three add-on acquisitions in East Kilbride Engineering Services, Tandel Systems and The Aircraft Group, AE Industrial said.

According to its website, the firm has a strategic partnership with Carlyle, through the Carlyle Equity Opportunity Fund (CEOF), to invest in aerospace and industrials. CEOF, which launched in 2011 and raised $1.1 billion, and invests $25 million to $150 million in the aerospace & defence, technology, consumer and retail, telecom and media, industrial and healthcare sectors, according to Carlyle’s website.

AE Industrial targets companies with a revenue of between $50 million and $500 million, according to its website. Its current investments include Belcan, Global Jet Capital, Wesco Aircraft, Dynamic Precision Group and AE Materials Group.

The firm has 11 investment and operating partners, three principals and two associates. Managing partner David Rowe co-founded AE Industrial’s predecessor, AeroEquity Partners, in 1998. Another managing partner Thomas Churbuck was previously a co-founding partner of power plant business PSM. The third managing partner, Michael Greene, joined the firm from UBS Capital.