LLR raises $538m for Fund IV

LLR Partners will not charge portfolio companies management or transaction fees in its fourth fund, which is targeting $800m with a $1bn hard-cap for investments in the lower mid-market.

Philadelphia-based mid-market specialist LLR Partners has raised at least $538 million for LLR Equity Partners IV, according to US Securities and Exchange Commission filings. 

In a pair of filings submitted Monday, LLR indicated that it had raised $508.9 million for LLR Equity Partners IV in addition to $29.2 million raised through a parallel structure. 

Documents from the Pennsylvania Public School Employees’ Retirement System indicate that LLR is targeting $800 million with a $1 billion hard-cap for the fund, with plans to invest in service-based companies in the business, consumer, financial, healthcare and software/IT sectors. The firm typically invests in the lower mid-market, with potential portfolio companies generating less than $100 million in revenue. 

In order to better align interests with management, the firm does not charge deal-specific management or transaction fees to portfolio companies, according to a Portfolio Advisors memo to the PSERS board of trustees.  

PSERS’ board approved a $200 million investment in LLR Equity Partners IV at its June meeting. Staff recommendation documents from that meeting indicate that LLR Equity Partners III, an $800 million 2008 vintage, was generating 1.2x multiple and 14 percent net internal rate of return.

A spokesperson for LLR Partners did not return requests for comment.

Earlier this month, LLR invested an undisclosed amount in Orbis Education, a national healthcare services provider. LLR’s other 2012 investments include Physicians Immediate Care, Ultimus Fund Solutions, Message Systems and Systems Integrator SDI.