Mount Kellett Capital, a private equity firm founded by the former head of the special situations group for Goldman Sachs, Mark McGoldrick, is raising up to $3.5 billion for its debut fund.
The fund had raised just under $2 billion for a second close in January, according to a source. It has since garnered total commitments of about $2.5 billion, sources told Reuters.
Mount Kellett was initially targeting commitments of $5 billion, market sources said. However, as the fundraising environment grew more difficult, the firm lowered its final target and is now looking at a final close of between $3 billion and $3.5 billion by the end of August.
The fund has a global mandate – about 45 percent of its capital will be invested in North America, 35 percent in Asia and 20 percent in Europe, a source said.
Another source said that about two-thirds of the fund’s capital has been earmarked for investments in distressed opportunities and the remainder in making general equity investments in private as well as listed companies.
One of the compelling things about them is they have no legacy assets.
More than one source attributed Mount Kellett's fundraising success to a strong Goldman network and the possibility that Goldman client money had followed McGoldrick's team. “A number of senior professionals from the Goldman Sachs special situations group are now a part of the senior Mount Kellet team,” the source said. As such, although it is a new firm with a new team, “there is continuity in that the team members have worked together for a long time”, the source added.
Mount Kellett has a team of 70 across US, Europe and Asia, of which about 50 are investment professionals. The firm is headed by McGoldrick and there are there is a regional head each for Asia, the US and Europe, said a source.
“One of the things some people have trouble with is that they have given themselves a lot of flexibility in terms of what they can do with their investment strategy,” a source said. However, “one of the compelling things about them is that they have no legacy assets, so while many funds are in trouble with their past investments and are busy managing existing portfolios, these guys have a large investment team and they don’t have any portfolio to manage”, he added.
What is distinctive about Mount Kellett’s approach is that the firm has first hired a team of investment professionals and then gone about raising capital, while many other GPs tend to first raise a certain amount of money and then build their team in keeping with the amount of money they can successfully raise, a source said.
Goldman Sachs placed the fund but declined to comment. Mount Kellett could not be reached by press time.