VSS sets modest target for next flagship fund

The mid-market media and communications specialist will launch its fifth fund in the first half of 2012 and target $750m to $1bn.

Veronis Suhler Stevenson, a US-based mid-market media specialist, has set a more modest target for its next flagship fund, which it expects to launch in the first half of this year, according to two people familiar with the firm’s plans.

The firm will target somewhere in the range of $750 million to $1 billion for its fifth private equity fund, the two people said. VSS informed investors late last year about its fundraising plans, the people said.

VSS declined to comment.

The firm closed its last flagship fund in 2006 on $1.3 billion. That fund was just about fully invested in 2010 with some capital left over for add-on investments. The fund’s performance could not be determined as of press time.

The smaller target should help the firm attract existing LPs back into the fold, one of the people told Private Equity International.

“With the smaller size, they have a pretty good story,” the person said. “They should be able to invest that a lot easier.”

The firm hit some turmoil in 2010 when it lost the co-head of its European operations Marco Sodi, who left after the firm stopped fundraising for a Europe-focused vehicle. The firm had collected about $104 million for VSS European Communications Partners for a first close with a target of about $836 million, according to documents from the US Securities and Exchange Commission. The firm pulled the fund off the market because of the sluggish fundraising environment, an industry source with knowledge of the situation told Private Equity International at the time.

Also, one of the firm's co-founders, John Veronis, co-chief executive officer, “withdrew” from the partnership in 2010 as part of a transition plan that had been in the works for many months. James Rutherford, an investor relations executive with the firm, left and joined 3i the same year.

Since then, the firm has launched a partnership with Ares Capital to provide “flexible” debt capital to small and mid-market companies in the information, education, media and marketing services industries. The firm expanded its debt team last year with the hire of James Dunleavy, a former Merrill Lynch executive, as managing director.

The firm had some successful exits in 2011, including the sale of Avatar International, which it sold to The Riverside Company for a 4x return. The firm also sold financial data and software copmany Ipreo to Kohlberg Kravis Roberts for a 3x return.