Lake Capital closes $800m Fund II

Chicago-based Lake Capital held an $800m close on its latest fund, representing a 60 percent increase over its inaugural, service-industry vehicle raised just three years earlier.

Chicago-based private equity group Lake Capital has closed on $800 million (€667 million), hitting the cap for its second fund, Lake Capital Partners II LP. The follow-up vehicle is succeeding the group’s $500 million inaugural fund, raised in 2002.

Terence Graunke, chairman and principal, Lake Capital

Lake Capital was founded by entrepreneurs Terence Graunke and Paul Yovovich. Graunke, a college drop-out, is perhaps best known for launching Eagle River Interactive, which he founded in 1994. Eagle River was one of the first Web-development companies to go public. Graunke also served as a partner at Pittsburgh-based investment firm Hawthorne Group. Yovovich, meanwhile, is a veteran of Advance Ross Corp., where he was a president until 1996. Both Graunke and Yovovich also co-founded Lighthouse Global Network, a Frontenac Company– and GTCR Golder Rauner-backed marketing outfit that was sold in 2000.

The firm defines itself as a middle market group that targets service-based companies across a range of industries. Lake Capital identifies on its Web site that its typical equity cheque ranges from $50 million to $75 million in size.

Recent deals for the group includes an investment in interactive marketing outfit MediaWhiz Holdings, a buyout of the logistics business of Sirva Inc., and an investment in lobbying firm Dutko Worldwide.

According to an SEC filing, which was dated October 18 and signed by Graunke, the new fund received commitments from 55 investors.

The filing also indicated that there would be a $16.3 million annual management fee, payable during the first six years of the fund, which represents a roughly 2 percent yearly fee.

The firm, according to reports, had initially been seeking $650 million for the fund. 

Calls to Lake Capital were not returned by press time.