Wellspring Capital Management has closed its fifth buyout fund on $1.2 billion, a record amount for the firm.
Fund V came to market in April 2009 with an original target of $1.3 billion, and had collected around $900 million by August. The firm has not made any commitments from the fund yet.
Fund V will target mid-market US companies in the consumer products, manufacturing, retail, distribution, and business and consumer services industries. Wellspring took restaurant chain Dave & Buster's private in 2006 for $375 million, and sold it in May to Oak Hill Capital Partners for $570 million.
Limited partners in Fund V include institutional investors from the US, Canada, Europe, Japan and Australia. The fund was placed by Credit Suisse.
Wellspring, founded in 1995 by Greg Feldman and the late Martin Davis, will charge a 2 percent management fee on commitments up to $1 billion, and 1.25 percent for commitments over $1 billion for the first five years of the fund's term. After five years, the fee will drop to 1 percent until the investment period ends, and will then equal 1 percent per annum of net invested capital.
The firm will give 100 percent of the transaction fee to LPs to pay down the management fee.
Wellspring's fourth fund, which closed on $1 billion in 2006, is nearly fully committed and was generating a total value multiple of 1.04x and a 2 percent internal rate of return as of 31 March, 2010, according to performance numbers from the Oregon Investment Council, an LP in several Wellspring funds.
As of 31 March, Fund III, which raised $675 million in 2002, was generating a 1.87x total value multiple and 25.5 percent IRR.
Including Fund V, Wellspring now manages more than $3 billion in assets under management.