Hellman & Friedman LLC has set a goal of more than $10 billion for its latest buyout fund, making it part of an elite group of private-equity firms seeking that much capital after the financial crisis.
The $10.25 billion target is 15 percent larger than the last fund raised in 2009 and exceeds the San Francisco-based firm’s $8.4 billion pool raised in 2007, according to two people with knowledge of the matter, who asked not to be named because the information is private.
Buyout firms are raising the most capital since 2008 after the stock market rally allowed them to exit investments and return money to investors. Managers handed back a record $135 billion to clients last year amid a robust exit environment, according to data from Cambridge Associates LLC, a Boston-based researcher and consultant.
Mary Beth Grover, a spokeswoman at Abernathy MacGregor Group, declined to comment on behalf of Hellman & Friedman.
Private-equity firms raised $127 billion from April through June, making it the fourth consecutive quarter that fundraising exceeded more than $100 billion, according to data compiled by London-based researcher Preqin Ltd. Apollo Global Management LLC (APO:US), Carlyle Group LP and Silver Lake Management LLC gathered funds of more than $10 billion in 2013, contributing to the strongest year for buyout capital raising since 2008.
Hellman & Friedman, led by Philip Hammarskjold, typically targets the service side of the economy, with investments in such areas as software; digital and traditional media; finance; insurance; business, marketing and information services; as well as industrial, energy and health-care companies.
Founded in 1984 by Warren Hellman, who died in 2011, and Tully Friedman, who now heads San Francisco-based private-equity firm Friedman Fleischer & Lowe LLC, Hellman & Friedman participates in buyouts, restructurings and minority deals. The firm generally invests $300 million to $1 billion in businesses located in developed markets, according to its website.
The firm’s last fund, which started investing in 2011, was producing a 6.8 percent net internal rate of return as of Dec. 31, according to data compiled by Bloomberg. The 2004 and 2007 pools had return rates of 28 percent and 11 percent, respectively.
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