Monomoy commits 3.5% to its third fund

The private equity firm, which makes controlling investments in the lower mid-market, recently closed its third fund, Monomoy Capital Partners III, on $767m.

Monomoy Capital Partners committed $27 million to its third fund, Monomoy Capital Partners III, which held a final close on $767 million in total commitments, or 3.5 percent of the fund, according to a person familiar with the matter. 

A filing with the Securities and Exchange Commission last week indicated that the fund had closed on $740 million, while the initial target for the fund was $650 million. The difference between the amount on the SEC filing and the $767 million amount announced by Monomoy is the GP commitment, according the source.

This seems to be at the higher end of the typical GP commitment in private equity. According to a survey from law firm MJ Hudson from June 2015, a 1 percent GP commitment used to be considered acceptable, but nowadays 1.5 percent is considered the norm and the GP commitment can go up to 5 percent. 

Most recently, Leonard Green made a 4 percent GP commitment to its latest fund Green Equity Investors VII. Kinderhook Capital made a $1.5 million GP commitment to Kinderhook Capital Fund V, which held a close on $750 million earlier this month, or 0.2 percent of the fund.

“We continue to believe that we are entering a very good economic environment for the Monomoy investment thesis, and we remain committed to providing capital to mid-market businesses that can benefit from strategic, operational or financial improvement,” Justin Hillenbrand, a Monomoy partner and co-CEO, said in a statement on Monday announcing the final close.

Acalyx Advisors and Lazard Frères & Co. acted as placement agents for Monomoy during the fundraise. Acalyx will also provide Monomoy with advisory services on investor relations going forward. Kirkland & Ellis served as legal counsel to Fund III.

Monomoy Capital Partners was founded in 2005 and has $986.4 million in assets under management, as of June 2016. The firm has a team of 26 professionals.