JLL Partners is trying to raise up to $200 million in preferred equity to support portfolio companies in its seventh fund, three sources told sister title Buyouts.
The New York-headquartered mid-market firm is not working with an advisor on the deal, the sources said. It is unclear if an investor has yet emerged on the transaction.
JLL Partners Fund VII closed on $1 billion in 2016, according to PEI data. The pool has just over $1 billion in net asset value remaining, one of the sources said. Fund VII was generating a 1.36x total value to paid-in multiple as of 30 April, according to performance information from New Jersey Division of Investment.
Preferred equity has become one of the options for GPs who need additional capital for existing portfolio companies. Capital is needed to both prop up ailing portfolio companies in the downturn, as well as to chase add-on opportunities for existing investments in the lower-valuation environment.
Investment in Fund VII include Xact Data Discovery, provider of eDiscovery, data management and managed review services for law firms and corporations; Aviation Technical Services, a provider of transport aircraft maintenance; and Point Blank Enterprises, which makes equipment for law enforcement.
JLL was formed in 1988 by Paul Levy, an ex-Drexel Burnham Lambert restructuring executive. Levy leads JLL along with managing directors Frank Rodriguez, Kevin Hammond, Daniel Agroskin and Eugene Hahn.
The firm has been in market raising its eighth fund targeting $1.25 billion. Fund VIII had raised more than $686 million as of November.
Numerous GPs are considering preferred equity investments in the downturn as a way to prop up older investments and secure capital for add-ons in fully deployed funds, sources told Buyouts.
GPs also are considering other forms of fund-level financing, including NAV loans secured by the net asset value of the fund rather than one investment.
This report originally appeared on sister publication Buyouts.