Welsh Carson raises $3.7bn for Fund XI

The firm collected about $800m from new investors since it began marketing in early 2008.

Welsh Carson Anderson & Stowe has closed its 11th buyout fund with $3.7 billion in commitments, beating its target of $3.5 billion. The firm’s prior fund, WCAS X, collected $3.4 billion in 2005.

Fund XI has been in marketing since about the end of the first quarter 2008, and held a first close on $2.5 billion last June. WCAS XI was almost fully raised by September, but the firm kept it in fundraising to include a few “stragglers”, according to a person with knowledge of the situation.

Welsh Carson did not use a global placement agent in the fundraising, the source said.

About $800 million of the fund comes from new investors. LPs in the fund include the California Public Employees’ Retirement System, Greenwich Town Retirement System, Illinois State Board of Investment, New York State Teachers’ Retirement System and the South Carolina Retirement System.

The fund had a couple of recommended commitments pulled back after the financial meltdown in September, which prevented the fund from reaching the $4 billion range. While it was not clear which LPs pulled back recommended commitments to WCAS XI, other investors that have withdrawn hard-circle commitments since last fall include the Pennsylvania Public School Employees’ Retirement Fund and the Alaska Permanent Fund.

WCAS XI will focus on investments in healthcare and information business services; it invested $100 million in dental prosthetics company GeoDigm in February.

Welsh Carson partners with portfolio company management teams and 40 percent of the firm’s portfolio companies are led by management teams working for their second, third or fourth time with the firm, according to the firm’s web site.

The firm was founded in 1979 and manages about $20 billion.