Sterling closes fourth fund at $1.2bn hard cap

Texas-based midmarket firm plans to continue its operations-focused investment strategy with its new fund.  

The Sterling Group has closed its fourth private equity fund at its hard cap of $1.25 billion in three months, according to a statement.

Commitments to the Sterling Group Partners IV fund include the Arizona Public Safety Personnel Retirement System that provided a $60 million commitment out of which $20 million was to the sponsor's co-investment vehicle, and from the Pennsylvania State Employees' Retirement System, according to Private Equity International's Research & Analytics division.

Officials from Sterling Group did not return calls by press time.

Sterling Group's new fund will target investments in manufacturing, distribution and industrial service businesses with an enterprise value of $100 million to $500 million. The fund's managers will continue to invest in divestitures and family-owned midmarket industrial businesses.

Kevin Garland, a partner with The Sterling Group, said in a statement that Sterling intends to continue to execute and improve upon its strategy for Fund IV.

Sterling typically invests $40 million to $100 million of equity per deal, including in US or Canadian companies as well as those owned by other private equity sponsors, according to its website.

A 33-year private equity group with 46 platform companies, Sterling Group has $2.4 billion of assets under management. It was established in 1982 by Sterling advisory partner Frank Hevrdejs and the late Gordon Cain, who launched Texas chemical company Sterling Chemicals in 1986.

Paul, Weiss, Rifkind, Wharton & Garrison served as counsel to Sterling Group.