Hellman & Friedman IX: How does $16bn measure up?

The San Francisco-headquartered firm has had one of the largest capital raises this year for its latest flagship fund.

Hellman & Friedman has raised $16 billion for its ninth flagship fund, according to an SEC filing.

The fund – which was seeking $15 billion – is the second largest to close this year, behind Carlyle Partners VII, which held a final close on its $18.5 billion hard-cap in July.

Fund IX is almost 50 percent larger than its predecessor, which closed on $10.9 billion in 2014. The $16 billion figure includes capital raised through parallel funds and the vehicle’s general partner commitment, according to the filing.

Hellman & Friedman declined to comment beyond the SEC filing.

Limited partners that committed to the fund include Los Angeles County Employees’ Retirement Association, Massachusetts Pension Reserves Investment Management Board and New Mexico State Investment Council.

Hellman & Friedman IX is larger than the targets of all other funds in market today, but it’s likely some of those managers on the capital raising trail will give the firm a run for its money. For example, Vista Equity Partners, while targeting $12 billion, is expected to cap the fund at around $15 billion. The software specialist has already “closed or circled” around $10 billion, according to documents prepared by Summit Strategies Group for the Fire & Police Employees’ Retirement System of the City of Baltimore.

Industry giant Blackstone is also returning to market with its latest flagship buyout fund, seeking around $20 billion. It is unclear whether fundraising has launched for this vehicle.

According to documents prepared for a New Mexico State Investment Council meeting, Hellman & Friedman Capital Partners IX has no preferred return hurdle within its fee structure, as reported by Private Equity International.

According to the documents, Hellman & Friedman IX plans to build a portfolio of nine to 15 investments, ranging in size from $500 million to $3 billion, in North America and Europe. The portfolio will have a primary focus on seven core sectors: software; financial services; business and business information services; healthcare; internet and media; energy and industrials; and retail and consumer.

The latest fundraising comes as Hellman & Friedman co-chief executive Philip Hammarskjold is planning to move into an executive chairman position in January 2019 amid a year-long succession process. Co-chief Patrick Healy will become sole chief executive, according to a Hamilton Lane note prepared for Santa Barbara County Employees’ Retirement System.

Hellman & Friedman has established itself as one of the industry’s top performers. Fund IV, a $2 billion 2000-vintage, and Fund V, a $3.5 billion 2004-vintage, were both named in the Private Equity Hall of Fame for outstanding returns.

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