Insignia Capital Group, a lower mid-market private equity firm, held a final close on its debut fund, Insignia Capital Partners, on $358 million, surpassing its original target of $350 million, Private Equity International has learned.
Insignia was founded by David Lowe and Mel Deane, both of whom came from Friedman Fleischer & Lowe, and Tony Broglio, who was previously at Lake Capital.
The fund launched in August 2012 without a placement agent. In December 2014, investment bank Sixpoint Partners was hired to lead the firm’s fundraising efforts to this final close.
First-time funds generally face the challenges of proving their track record to investors and raising capital to make deals; several choose to start on a deal-by-deal basis to draw capital for individual transactions rather than blind-pool funds. Placement agents can help match funds to investors with their resources that a new fund may not necessarily have.
“The successful fundraise is the result of several key factors combined with the effective marketing partnership between Insignia and Sixpoint Partners,” David Lowe, chief executive and partner of Insignia, said.
When Sixpoint began working on the fund, the PE firm had raised only about $100 million, according to a January 2015 filing with the Securities and Exchange Commission. Four months later, it had secured an additional $50 million and held a final close in December.
“There is an environment that is welcoming for established spinout funds with a cohesive background and proven track record,” Sixpoint co-founder and partner Eric Zoller told PEI. “This transaction is proof of strong demand out there for spinouts, which are likely to outperform the market today.”
Through its fundraising, the fund drew investments from more than 30 investors, including family offices, public pensions, insurance companies, fund of funds, consultants and endowments.
The Walnut Creek, California-based firm invests in North American lower mid-market companies in the consumer, health care and business services sectors, with a focus on improving operating performance. According to its website, Insignia acquired Truco Enterprises, a tortilla chips, salsa and queso developer, in 2014 from Arbor investments and Truco co-founders. It bought a health care marketing company metanexgen in April 2015.
Simpson Thacher & Bartlett was the legal adviser to the fund.