Frontier Capital has closed its first institutional fund on $115 million (€81 million), exceeding its $100 million target and doubling the size of its first vehicle.
Frontier went to market for its second fund about 18 months ago, without a placement agent, and received commitments from 15-some limited partners including Lockheed Martin Corporation Master Retirement Trust and the Duke University Endowment.
The fund will target growth equity investments in business services companies in the Southeast, South and Mid-Atlantic regions of the US.
“Our investment size has increased a bit,” said founding partner Richard Maclean. “We found that a lot of expansion stage companies want a minimum investment of between $5 million and $10 million, so our first fund was actually a little small for our strategy.”
Fund II has made two investments to date: Ryla Teleservices in Kennesaw, Georgia and Conclusive Marketing in Franklin, Tennessee. Maclean said the fund will also announce a third investment in a managed information technology services company next week.
Frontier’s first fund, which closed on $45 million in 2000, was registered as a Federal Deposit Insurance Corporation, and was invested in primarily by family offices.
Maclean, Andrew Lindner and Mike Pappas founded Frontier in 1999. Maclean previously worked at Blue Ridge Investors and Lindner worked at investment firm Stephen’s Inc. Pappas is a special limited partner at Frontier: he sits on the firm’s investment committee and represents some its larger LPs, but primarily works at Alpheus Capital Management.