Kohlberg hits hard cap on $1.5bn buyout fund

Nearly double the size of its predecessor, the fund has already been 20 percent invested by the firm co-founded by Jerome Kohlberg, a founding partner of KKR who effectively retired from the private equity industry in 1994.

Kohlberg & Company has closed its largest fund to date, reaching its hard cap with $1.5 billion (€959 million) in commitments. The firm’s previous fund closed on $800 million in 2004.

Launched in March 2007, Kohlberg Investors VI surpassed its $1 billion target in June but continued fundraising until earlier this month. Kohlberg, with the assistance of placement agent Lazard, has secured the commitments of 65 limited partners, roughly 80 percent of whom had an existing relationship with the firm.

Public pension funds comprised the fund’s biggest swathe of investors, followed by corporate pensions and endowments. Investors in its prior fund included The California Public Employees’ Retirement System, Hamilton Lane, and the US Steel and Carnegie Pension.

The firm’s partners have also committed $80 million to the fund.  

A Kohlberg partner involved in the fundraising told PEO the fund will primarily target manufacturing companies in the industrial and consumer sectors and “will selectively look at both health care and business services”.

Twenty percent of the fund has already been invested in the controlling stakes of four companies.

In June of last year, Kohlberg acquired Trico Products, a leading windshield wiper manufacturer, for $113 million. That purchase was then followed by the $295 million October buyout of Hoffmaster, a Wisconsin-based manufacturer of disposable tableware.  

Kohlberg partners are awaiting the April closure of a $138 million acquisition and subsequent consolidation of SM&P Utility Resources and Central Locating Services, two infrastructure locating services. SM&P and Central Locating identify subsurface structures like power and cable lines so they are not affected by construction sites.

Kohlberg also just announced the $200 million spin-off acquisition of former Nike subsidiary Bauer Hockey, an 81-year old manufacturer of hockey equipment. That deal is expected to be concluded by the end of the year.

Kohlberg & Company has invested about $2 billion across five prior funds, and since its inception in 1987 has raised $3.7 billion of committed capital. The firm was co-founded by Jerome Kohlberg after he split from former partners Henry Kravis and George Roberts. According to the firm's website, Kohlberg retired from the company in 1994.