Irving Place Capital, the former private-equity unit of Bear Stearns Cos., is asking investors for a two-year extension to deploy its 2006 buyout fund and will delay raising a new one until it hands more cash back to investors, according to two people familiar with the matter.
The $2.7 billion Irving Place Capital Partners III LP (PEF3550:US), which has already received one extension, must stop investing this month unless investors grant it permission to continue, said the people, who asked not to be identified because the plans are private. The fund had invested 78 percent of assets as of Sept. 30, according to data from Oregon Public Employees Retirement Fund.
Glen Gullickson, a spokesman at Brunswick Group, declined to comment on behalf of New York-based Irving Place.
Buyout firms have sought more time to invest funds raised during the buyout boom as the pace of deals plunged after the 2008 financial crisis. Firms raised $702 billion from 2006 to 2008, of which more than $100 billion must be deployed by the end of this year, according to a report from Triago SA, a Paris- based firm that helps private-equity firms raise money.
Private-equity funds typically invest over a five-year period, and must seek permission from their limited partners to continue investing if they don’t put all their capital to work during that time. Irving Place’s 2006 fund, which is almost double the size of the $1.5 billion vehicle (PEF3549:US) it raised in 2000, is past the 75 percent threshold most firms need to reach before they start raising money for a successor fund.
Rag & Bone
The fund’s investments include Chromalox, a global manufacturer of electric heating and control products, and a minority stake in Rag & Bone, an apparel and accessories brand.
Fund III was generating a 1.04 times multiple and a 1.7 percent annual internal rate of return as of Sept. 30, according to the Oregon data. The median IRR for funds of that year is 9.41 percent, according to data from Cambridge Associates.
Irving Place Capital typically invests $75 million to $250 million in companies with more than $20 million in earnings before interest, taxes, depreciation and amortization, or Ebitda, according to the firm’s website. The firm targets businesses in North America and Western Europe that are focused on the retail, consumer, industrial and health-care sectors. Irving Place became an independent firm after Bear Stearns was acquired by JPMorgan Chase & Co. in 2008.
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