Diamond Castle closes $1.8bn debut fund

The DLJ spinout led by Larry Schloss has already made six investments, representing approximately 40 percent of the capital raised.

New York-based private equity firm Diamond Castle Holdings has closed its debut fund, Diamond Castle Partners IV, at $1.8 billion (€1.4 billion), Diamond Castle said in a statement.

“We are extremely gratified by the investor support we have received, with over 75 percent of the capital coming from prior investor relationships,” Lawrence Schloss, Diamond Castle’s chairman and chief executive officer, said in the statement.

Schloss founded Diamond Castle after he left his position as the chairman of DLJ Merchant Banking, the private equity arm of Credit Suisse First Boston, in 2004. Michael Ranger, David Wittells, Andrew Rush and Ari Benacarraf joined him from DLJ.

The firm plans to invest in leveraged buyouts and recapitalizations of companies valued between $200 million and $1.5 billion. It will target the energy and power, financial services, media and communications and healthcare industries, particularly in North America.

Diamond Castle has already used $670 million, approximately 40 percent of the capital, to invest in six companies, the statement said. Those companies include Rutland, Vermont-based wind-energy developer Catamount Energy Corp., Bermuda-based reinsurance company Harbor Point Limited, Chicago, Illinois-based equipment rental provider NES Rentals Holdings, Fort Lauderdale, Florida-based outsourced customer care provider PRC and Dublin, Ohio-based consumer finance provider Checksmart Financial Company. Bonten Media Group, an affiliate of Diamond Castle, agreed to acquire BlueStone TV Holdings, a subsidiary of Wichita, Kansas-based BlueStone Television from Providence, Rhode Island-based private equity firm Providence Equity Partners for $230 million last month.

DLJ lost a set of its private equity professionals to another new firm in 2005. Thompson Dean, the former head of DLJ, and 15 of his former Credit Suisse colleagues left the firm to set up Avista Capital Partners, a New York-based independent buyout firm. Dean is the co-managing partner and chief executive officer of Avista, which focuses on the energy, healthcare and media industries. Avista acquired MidOcean Partnersinterest in Thompson Publishing Group, a subscription-based information services provider, in November.

DLJ itself closed a fund, DLJ Merchant Banking Partners IV, valued at $2.1 billion, in October. That value includes $225 million that Credit Suisse committed to a side-car vehicle that the team can use to fund larger transactions.