Arsenal closes Fund III on $875m

The New York-based firm exceeded its $750m target, raising 75% more capital than its predecessor fund.

Lower mid-market firm Arsenal Capital Partners has closed its Fund III on $875 million, north of its $750 million target.

The New York-based firm has invested $195 million from Fund III in four platform investments to date. Forbes Private Capital Group acted as placement agent for Fund III. Arsenal’s previous fund collected $500 million in 2006.

Limited partners in Fund III include pension funds such as the Oklahoma Police Pension Retirement System and the University of California Retirement System, according to Private Equity International’s Research and Analytics division. Fund III also attracted commitments from endowments, foundations, family offices and financial institutions such as Northwestern Mutual Life Insurance.

Roughly half of the LPs in Fund III are based in the US, with the remainder coming from Europe and Asia, according to a statement.

Healthcare- and specialty industrial-focused Arsenal had a particularly active year on the investment front in 2012, completing eight new investments. Arsenal also sold specialty chemicals business Novolyte and recapitalised freight and trade services company Charter Brokerage.

The firm focuses on transactions between $50 million and $250 million, backing US-headquartered companies with “significant operations and growth opportunities in both the US and internationally”, according to a statement.

Arsenal was founded in 2000 by Terrence Mullen, a former principal at Thomas H Lee Partners, and Barry Siadat, formerly of AlliedSignal/Honeywell International. The firm has completed 57 investments since its founding and has $1.6 billion of assets under management.