Vicente Capital raises $150m for debut fund

The Kline Hawkes spin-out, which will target lower mid- market companies with revenues of $2m to $25m, closed the fund amid a difficult fundraising environment for new firms.

Mid-market specialist Vicente Capital Partners has raised $150 million for its debut growth equity fund.

The Los Angeles-based firm, led by a group of managing directors and principals from private equity firm Kline Hawkes, will invests between $5 million and $15 million in privately held growth businesses across North American in partnership with management, according to a statement from the firm.

Vicente specialises in non-control and control equity investments in companies with $2 million to $25 million revenues with the potential to achieve $50 million in revenue over a five-year-period. The firm’s investment strategy includes an emphasis on Internet services, telecom, healthcare services, education and aerospace and defense companies.

Limited partners in the latest fund include the California Public Employees’ Retirement System, Fairview Capital, JP Morgan Asset Management, the LA Fire and Police Pensions, the New Mexico State Investment Council and the New York Common Retirement Fund.

The firm is led by managing partners Jay Ferguson, Klaus Koch and Nicholas Memmo. Both Ferguson and Memmo are veterans of Kline Hawkes, which shares a similar investment philosophy with Vicente: mid-market and expansion-stage companies with revenues greater than $2 million. Ferguson and Memmo continue to serve as general partners of Kline Hawkes Pacific, a $155 million fund.

The debut fund close comes at a time when the limited partners are backing away from committing to new managers due to overallocated portfolios and drying distributions.

“Certainly, if you’re a first time fund it’s even more difficult [to raise money],” Jay Fewel, senior investment officer for the Oregon Public Employees’ Retirement System, recently told sister publication Private Equity International. For more insights on the fundraising market, check out this month’s edition of PEI.