Kohlberg hits $520m on first close

The firm’s previous investor fund has generated strong returns, posting a 16.8% IRR as of 31 December.

Kohlberg & Company has held a first close on its seventh investors fund, hitting $520 million at 15 September, according to a source with knowledge of the fund. The firm has set a $1.5 billion target and hard-cap for the fund.

Kohlberg Investors VII is structured through multiple vehicles, the source said. The firm has submitted several filings with the US Securities and Exchange Commission indicating that Investors VII had raised at least $500 million at 29 September.

It is unclear when the firm launched the fund.

The seventh fund will focus on middle market companies with enterprise values between $100 million and $750 million, providing equity capital investments of $50 million to $200 million. The firm’s previous fund, Kohlberg Investors VI, followed a similar strategy and has generated a net IRR of 16.8 percent as of 31 December 2010, according to documents from the Public Employee Retirement System of Idaho.

Kohlberg VII has already received commitments from a pair of US pension funds. The School Employees Retirement System of Ohio re-upped $40 million to the fund in April. Earlier this month, the fund secured a $75 million commitment from The Teachers’ Retirement System of Louisiana.

The firm was formed by Jerome Kohlberg, one of the three founders of Kohlberg Kravis Roberts. Kohlberg left KKR and formed his own firm in 1987. Kohlberg retired from the firm in 1994, according to the firm’s web site.