Mid-market firm The Riverside Company has held a first close on about $605 million for its Riverside Capital Appreciation Fund VI, according to a source with knowledge of the situation.
Fund VI was launched in the summer of 2012 and is expected to close before the end of 2013. The fund has a $1 billion target and $1.5 billion hard-cap and will invest using the same strategy as it predecessor fund, backing North American-based businesses with earnings before interest, tax, depreciation and amortisation of between $5 million and $20 million. Limited partners in Fund VI include the Ohio Police and Fire Pension Fund and the Washington State Investment Board. according to data provider Private Equity Connect.
Riverside declined to comment on fundraising.
Riverside Capital Appreciation Fund V closed on $1.17 billion in 2009 and is roughly 80 percent invested, having made 27 platform investments and 21 add-on acquisitions. Riverside has exited four of the 27 companies, generating a combined net internal rate of return of 33 percent and 3x cash-on-cash multiple.
Last month, Riverside sold environmental testing company Wildlife International, netting an 11.9x cash-on-cash return for the firm, according to one source with knowledge of the deals. Also in December, the firm sold specialty chemicals manufacturer DuBois Chemicals; a deal that generated a 5x return, the source said. Total sales and EBITDA for DuBois rose by 105 percent and 221 percent, respectively, over the course of Riverside’s ownership.
Riverside finished 2012 having exited 14 companies during the year and making 28 acquisitions, split between seven platform investments and 21 add-ons. The firm was founded in 1988 and manages over $3 billion in assets.