Less than two years since raising its previous vehicle, Stone Point Capital is back in market, targeting $5.75 billion for its eighth Trident fund.
Trident’s fund sizes have increased steadily with each fundraising round. Fund VII raised $5.5 billion in 2017, Fund VI raised $4.5 billion in 2014, Fund V raised $3.5 billion in 2010 and Fund IV raised $2.25 billion in 2007.
The firm has set the hard-cap for Fund VIII at $6.5 billion.
Stone Point Capital’s Trident funds seek to make equity investments of between $50 million and $500 million in insurance and other financial services companies.
Washington State Investment Board committed $300 million to Fund VIII, according to documents dated 21 February.
The pension system signed Stone Point on as a new GP in 2016 when it committed $250 million to the fund’s predecessor, Trident Fund VII. At that time Washington SIB expressed concerns related to Stone Point’s limited experience in exiting larger investments, exposure to single industry sectors and potential impact of changes in financial regulations and interest rates, according to minutes from a December 2016 meeting.
However, a mitigating factor was the GP’s diversification across multiple sub-sectors in the financial industry, private equity investment officer Björn Seebach said at the time.
In addition, Stone Point had experience in helping companies navigate changes in the regulatory environment and the ability to invest a broad range of cheques through its funds, he said.
Trident’s Fund VI produced a net internal rate of return of 18.7 percent and a multiple of 1.1x as of 30 June, according to documents from the California Public Employees’ Retirement System.
Fund V was generating an IRR of 12.1 percent and a multiple of 1.69x as of 30 June, according to Florida State Board of Administration documents.
Several pension systems have invested in previous Trident funds. These include New York City Employees’ Retirement System, California State Teachers’ Retirement System, HarbourVest Partners, Hawaii Employees’ Retirement System and Alaska Retirement Management Board.
Stone Point is currently investing out of Trident VII. In December, it acquired Rialto Investment and Asset Management from Lennar Corporation for $340 million. It also took AmTrust Financial Services private and acquired American Mortgage Consultants and Grace Hill.
Stone Point also acquired Eliassen Group from Riverside Partners, and took majority stakes in Sabal Capital Partners, Genex and LegalShield .
Stone Point is led by chief executive officer Charles David and chairman Steve Friedman, previously head of investment banking and chairman of Goldman Sachs, respectively.
Other members of the investment committee include senior principal and general counsel David Wermuth and senior principals James Carey and Nicolas Zerbib.
The firm has raised more than $19 billion in LP commitments and invested in more than 100 companies to date.