KPS Capital Partners has raised an additional $800 million from existing investors in KPS Special Situations Fund III, which closed on $1.2 billion in 2007.
Market sources reported high levels of investor appetite for the “supplemental” or “top-up” fund, which the firm will use to expand its capital for new investments.
Investors in Fund III, which received subscription requests equal to more than four times the fund’s original $1 billion target, include the California Public Employees’ Retirement System, the Denver Public Schools Retirement System, James Irvine Foundation, MC Financial Services, New Jersey Division of Investment and the State of Connecticut Retirement & Trust Funds.
KPS has been investing from the third fund through the market downturn. It created a brewery platform called North American Breweries with the acquisitions of Labatt USA from Anheuser-Busch and High Falls Brewing Company from the US arm of French company Pernod Ricard. The firm also acquired assets from china and crystal maker Waterford Wedgwood, which was in administration in the UK.
KPS has raised money in the past to supplement an existing fund. The firm collected $160 million for its first fund in 1998 and later raised $50 million for KPS Supplemental Fund.
Other firms raising top-up funds include Southern Europe-focused Investindustrial, which is targeting €100 million for add-on deals; Graphite, which is reportedly raising €35 million; and Nordic Capital, which Reuters reported is raising €150 million for “some defensive portfolio work” and add-on deals.
Meanwhile, some firms have been raising annex funds to tend to struggling companies in older portfolios. Kohlberg Kravis Roberts recently closed KKR E2 Investors, an annex fund to the firm’s €4.5 billion second European fund, while MatlinPatterson collected $165 million earlier this year to aid companies in its 2003 fund.