Irving Place Capital restructures Fund III

Irving Place Capital has completed the restructuring of its third fund into a new $1.5 billion investment vehicle, officials from the firm told Secondaries Investor‘s sister publication Private Equity International (PEI).

The vast majority, 90 percent, of limited partners in its 2006 vintage $2.7 billion fund voted to approve the rollover of their interests into a new Irving Place Capital Partners Fund III. The restructured fund has $1.2 billion in unrealised investments.

“If you were an existing LP and you decided to sell, you received a liquidity option for 100 percent of unrealised value, or alternatively if you rolled over, you would get the same original economic terms,” John Howard, co-managing partner of Irving Place Capital told PEI.

Rollover investors also committed $300 million in fresh capital to the new vehicle, which has an additional $200 million in dry powder to invest with LPs on a co-investment basis, according to people familiar with the restructuring.

Irving Place also committed an undisclosed amount of capital to the new fund which has been extended by five years and has a two year investment period for the new capital, according to sources.

As part of the restructuring, London-based Coller Capital bought out $500 million of investor commitments from the previous fund, according to reports.

“This transaction gave us time to continue to grow the value of the fund with what is a very attractive portfolio without the distraction of a new fundraise,” said Phil Carpenter, co-managing partner of Irving Place.

Howard said that the firm did not receive complaints from LPs about the fund restructuring, which was overseen by Park Hill Group. He noted that some of the fund’s investments in financial service companies in the mid-2000′ ran into trouble amid the financial crisis, which negatively impacted the fund.

Irving Place, which has invested more than $1.9 billion since 2009, will put the remainder of its new fund to work by investing in industrial, core packaging, retail and consumer businesses valued at between $150 million to $500 million. It began restructuring the fund in December 2014. In April of this year, the firm acquired Ohio children’s entertainment company Bendon for an undisclosed sum.

Last week it announced the appointment of former Kennametal CEO Carlos Cardoso to serve as senior advisor in order to originate new transactions in the industrial sector and assist with operational improvements for its relevant portfolio companies.

Houlihan Lokey provided a fairness opinion on the fund restructuring and Kirkland Ellis served as counsel to Irving Place.