Genstar Fund VI targets $1.5bn

The San Francisco-based mid-market firm is expected to hold a first close on $750m in April.

Genstar Capital is in the process of raising its sixth fund targeting $1.5 billion, according to a source close to the situation. The firm is anticipating a first close on roughly $750 million by the end of the March.

Fund VI will continue Genstar’s strategy of investing in selected segments of the life sciences, healthcare, financial services, software and industrial technology industries. The firm is currently in the process of investing its fifth fund, which closed on $1.6 billion in June 2007.

Park Hill Group is working as placement agent for the fund.

Genstar Capital Partners V was generating a 1.06x return multiple and a 3.9 percent internal rate of return as of 30 September 2010. The firm historically has generated a 3.6x return on realised investments, a source told PEI.

In August, the firm reportedly scored a 7.8x return on its $520 million sale of decorative label supplier Fort Dearborn Company to KRG Capital Partners.

Genstar did not return a call for comment.

Last month, the firm hired healthcare veteran Paul Black as an operating executive. Black most recently worked as a senior advisor to New Mountain Capital and as a director on a number of the firm’s portfolio companies.

Genstar also recently promoted Ryan Clark to managing director, and Roman Margolin and Eli Weiss to vice presidents.

Genstar is based in San Francisco and has more than $3 billion of committed capital under management.

Christopher Witkowsky contributed to this report.