Arsenal closes second fund on $500m

New York-based private equity firm Arsenal Capital Partners has closed its second fund, Arsenal Capital Partners II LP, Arsenal said in a statement. With $500 million (€312.4 million) in committed capital raised in nine months, the fund exceeded the target of $400 million, the statement said.

This fund will invest in the healthcare, specialty chemicals, aerospace and defense, specialty components, business services and distribution and logistics sectors, the statement said. It will target companies valued at $50 million to $250 million.

Terrence Mullen, Arsenal Capital Partners

“Approximately 65 percent of Fund II investors are US-based and 35 percent are international, with a nice balance of endowments and foundations, pension funds, financial institutions, universities and investment funds,” said Terrence Mullen, a managing director at Arsenal, in the statement.

Arsenal’s returning investors include Adams Street Partners, National City Equity Partners, PPM America, RCP Advisors, Oklahoma Police Pension and Retirement System and the Northeast Utilities Service Company Retirement Plan. Its new investors are ATP Private Equity Partners, Grove Street Advisors, PKA, Skandia Liv and Swiss Re.

Mullen founded Arsenal in 2000 when he left Thomas H. Lee Partners. He started the firm in conjunction with Barry Siadat, formerly of AlliedSignal / Honeywell International. In addition to Mullen and Siadat, Arsenal is led by James Marden, formerly of Medical Logistics, and Jeffrey Kovach, formerly of Thomas H. Lee.

Arsenal created Vertellus Specialities, a life science and natural products specialty chemicals company by combining two of its portfolio companies, Rutherford Chemicals and Reilly Industries, in July of 2006.

Arsenal’s $300 million debut fund closed in June of 2003.