Lake Capital, a transatlantic private equity fund manager with offices in Chicago and London, has held a final close of its first standalone fund to target the business services sector.
The firm has raised a total of $500m, attracting a broad range of North American and European investors, including pension funds, financial institutions and university endowments.
It is the first time that Lake Capital, set up by Terence Graunke and Paul Yovovich in Chicago five years ago, has raised a stand-alone fund. “This is the first time we have bundled up the fundraising process,” said Julian Hanson-Smith, principal at the firm and head of its London office. “Previously we would seek to raise capital on a per platform basis, raising up to $125m each time.”
The $500m raised will be invested across five to seven platform companies, which will be grown both organically and through bolt-on acquisitions. “Typically, we will make one primary acquisition, usually based in the US or the UK,” added Hanson-Smith. “We will then look to build up the company’s presence in Europe through three to five bolt-on deals. In total, we intend to invest between $70m and $100m per platform.”
The firm has a fairly broad remit for its investments in the business services sector, although principal sectors include marketing, finance-related, infrastructure and specialty services such as corporate training and professional publishing. “We are more interested in finding the right business and management team than a specific sector.”
The firm’s most notable exit to date was Lighthouse Global Network, sold to Cordiant Communications in July 2000 in a deal worth $592m. “We’re currently working on a range of deals in the US and UK. The pipeline is looking quite strong.”
Credit Suisse First Boston acted as placement agent for the fundraising.