Marlin raises $3.25bn for mid-market

The firm, which is nearly doubling AUM with the new capital, has closed on two funds after fundraising for less than five months.

Marlin Equity Partners has closed two funds, raising a total of $3.25 billion in less than five months to focus on mid-market investments, the firm said in a Tuesday statement.

The Los Angeles-based investor closed on $2.5 billion for Marlin Equity V, above its $2 billion target; and on $750 million for Marlin Heritage II, above its $500 million target.

Fund V will target the mid-market and upper mid-market in North America and Europe, while Heritage II will target the lower mid-market in North America. 

Fund V is more than double the size of its predecessor, Marlin Equity IV, which closed on its $1.6 billion hard-cap in the summer of 2013. Heritage I closed on $400 million in 2014.

Limited partners in the two new funds include Texas Municipal Retirement System, Ohio Police and Fire Pension Fund and Texas County and District Retirement System.

According to TMRS, which committed $60 million to Fund V and $15 million to Heritage II, Fund V is targeting a 20 percent internal rate of return and 2X investment multiple, while Heritage II is targeting a 25 percent IRR and 2.5X multiple. 

Marlin invests in the software and technology sector, with additional secondary sectors that the firm may opportunistically pursue, a commitment recommendation from TMRS showed.  

Under Fund V, it will target to invest in 15 to 20 platform companies, committing $75 million to $300 million per investment. Heritage II will make 15 to 20 platform investments between $10 million and $60 million each.

Because Fund IV is still young, most of the investments in that fund are largely unrealised and performance data is not relevant. Not recent performance data was available for Fund III

Marlin, which wasn't immediately available to comment, now has $6.7 billion in assets under management.