GTCR LLC, one of two private-equity firms that spun out of Chicago-based buyout pioneer Golder Thoma & Co., plans to seek $3.25 billion for its next private equity fund, according to a person familiar with the situation and a document prepared by a placement agent.
The firm, which is based in Chicago, is expected to begin officially marketing the fund next year, according to the person, who asked not to be identified because the information is private. At that size, GTCR Fund XI LP raise about the same amount as the firm’s prior fund, which was completed in 2011.
The fund, which will make investments in industries such as financial services and technology, health care and growth- business services, faces increasing competition for investor capital. The number of funds vying for money in the third quarter rose 11 percent to 1,918 from the same period last year, according to researcher Preqin Ltd.
Eileen Rochford, a spokeswoman at The Harbinger Group, declined to comment on behalf of GTCR.
The firm’s latest fund was about 37 percent invested as of June 30, according to calculations based on Washington State Investment Board disclosures.
Since that time, it has made a few more investments, including the purchase of Premium Credit Ltd., a provider of payment and financing services in the U.K. GTCR in October teamed up with Cannondale Investments to acquire OneSource Information Services Inc., a subsidiary of Infogroup Inc. It has also exited an investment, agreeing in July to sell Classic Media to DreamWorks Animation SKG Inc. (DWA:US) for $155 million.
While GTCR is returning to market just two years after raising the predecessor fund, the firm’s model involves the commitment of capital to management teams that acquire companies and make add-on acquisitions, which means money is drawn down over time rather than invested at once.
The firm’s $2.75 billion fund from 2006 was producing a 1.3 times multiple and 9.3 percent net internal rate of return as of June 30, according to performance data from Washington State Investment Board. The 2003 fund was generating a 1.8 times multiple and 25 percent IRR as of the same date.
GTCR in October said that managing director Bruce Rauner would leave the firm after more than three decades. Rauner wanted to focus more on civic and philanthropic interests, according to a statement at the time.
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