Caltius closes $300m mezzanine fund

The Los Angeles-based firm has closed its third fund, with about 80 percent of capital commitments coming from new LPs.

Los Angeles-based Caltius Capital Management has closed its third mezzanine fund on $300 million (€243 million).

Fundraising for Caltius Partners III began back in September, with an initial fund target of $250 million. According to Caltius chief executive officer Jim Upchurch, virtually all of the firm's existing investors came back for the third fund, though he said more than 20 new limited partners committed capital this time around. More than 90 percent of the capital came from US investors with the rest coming from European LPs.

Caltius' inaugural fund closed in 1997 on $43 million, and Fund II closed in 2000 with $172 million in commitments. Upchurch said that while the previous two funds saw one large LP dominate the fund, the newest vehicle is Caltius' first 'truly broad-based' fund.

Investors in the new fund include Adams Street Partners, HarbourVest Partners and US Bancorp, as well as insurance companies, private and public pension funds and a number of high-net worth individuals. About 80 percent of the capital invested comes from new investors, Upchurch said.

The fund will invest between $5 million and $30 million in companies in service-oriented non-capital intensive industries including healthcare, consumer products and business services. Caltius looks at businesses with private equity sponsors as well as entrepreneurial and family-owned companies that have no equity backing. The firm will make investments in the continental US, with a focus on the West, Upchurch added.

Back in January, Caltius provided a $9 million subordinated debt investment for Phoenix-based Vantage Mobility International, which retrofits minivans for use by the handicapped and disabled.