Riverside Partners closes fourth fund on $406m

The Boston-based lower mid-market buyout shop has invested through the downturn, making several add-on and growth capital investments.

Riverside Partners, a Boston-based firm, has closed its fourth buyout fund on $406 million, beating its original target of $325 million for investments in healthcare and technology.

Atlantic-Pacific Capital served as placement agent for the fundraising. The firm was able to retain existing limited partners from prior funds, and attract new investors, according to a statement.

Investors in Riverside Partners IV include the Illinois State Board of Investment, Chicago, which committed $25 million in December. The Arkansas Teacher Retirement System and Yale also invested in the fourth fund. The firm closed its third fund on $225 million in 2006.

The firm has made several add-on investments through 2009, including the acquisition in September of wireless technology company JBM by portfolio company Sixnet for an undisclosed amount. In July, the firm made a growth investment for an undisclosed amount in Vocollect, which provides mobile voice technology to companies.

Riverside Partners invests in lower mid-market healthcare and technology companies. The firm was founded in 1989 and manages more than $500 million in more than 50 companies.

Firms have been able to close funds over the past year despite an anemic fundraising environment. Clayton Dubilier & Rice just wrapped up fundraising on its eighth fund, collecting $5 billion. Hellman & Friedman raised $8.8 billion for its seventh fund, which closed in October. Secondary firms especially have had success securing capital recently, with Partners Group closing a €2.5 billion fund, Portfolio Advisors raising $1.1 billion and JPMorgan collecting $1 billion for secondaries investments.