HIG launches $1.6bn mid-market fund

The firm closed its fifth flagship fund and a Europe-focused fund earlier this year.

HIG Capital has launched its Middle Market LBO Fund II with a $1.6 billion target, according to documents filed with the US Securities and Exchange Commission.

HIG Middle Market, an extension of HIG’s private equity business, focuses on lower mid-market leveraged buyouts and growth equity investments in business services, education, healthcare and specialty manufacturing companies with earnings before interest tax demortisation and amortisation of more than $30 million, according to a statement from the firm. Investors in the fund include the Maine Public Employees’ Retirement System, according to Private Equity International’s Research and Analytics division.

In July, HIG closed its third Europe fund on €825 million. The fund was significantly oversubscribed and surpassed its €750 million hard-cap after less than three months in the market. The fund attracted a $100 million commitment from The Pennsylvania State Employees’ Retirement System and $26 million from The Massachusetts Pension Reserve Investment Board, PEI reported.

HIG also raised its fifth flagship private equity fund this year, hitting its $1 billion hard-cap in March after launching in January. The fund, which makes investments across the US lower middle-market, was also oversubscribed. Investors in Fund V include HarbourVest Partners and the Kentucky Retirement Systems, according to PEI data. 

HIG’s prior flagship fund closed on $750 million in June 2006. As of 31 March, the fund was generating a 2.03x return multiple and a net internal return rate of 41.6 percent, according to documents from The University of California Board of Regents.

Miami-based HIG has more than $13 billion of capital under management. Its private equity funds focus on leveraged buyouts, equity, debt and other investments in small and medium-sized companies. HIG also manages funds that funds invest in real estate, debt and credit, lending and life sciences, according to its website.

Founded in 1993, HIG is led by founders Sami Mnaymneh, who previously worked at The Blackstone Group, and Tony Tamer, a former partner Bain & Company. In Europe, the firm works out of London, Hamburg, Madrid and Paris. HIG has seven US offices, including New York, Chicago and San Francisco. The firm opened a Rio de Janeiro office in 2012.

HIG was unavailable for comment at press time.