LLR Partners closes $360m fund

The Philadelphia private equity firm has closed its second fund on $360m, ahead of its initial target of $300m.

Philadelphia-based private equity firm LLR Partners has held a final close on LLR Equity Partners II, a $360 million (€276 million) fund dedicated to middle market companies primarily in the Mid-Atlantic region.

According to Mitchell Hollin, an LLR partner, the firm began fundraising approximately one year ago with a target of $300 million. Many of the investors include local pension funds such as the Pennsylvania State Employees’ Retirement System (PSERS), the Pennsylvania Public School Employees’ Retirement System and the City of Philadelphia Board of Pension and Retirement. PSERS is the fund’s largest investor with a $75 million commitment.

Hollin noted that approximately two-thirds of the fund is comprised of institutional investors with the remaining one-third composed of high net worth individuals. By contrast, the firm’s first fund, LLR Equity Partners, which closed on $260 million in 1999, was split equally between institutions and individuals. Hollin added that LLR Equity Partners is over 90 percent committed.

The firm will make equity investments of $10 million to $40 million per transaction, focusing on companies in the business services, healthcare, financial services and IT industries. In September 2004, LLR sold healthcare software provider Innaphase to Thermo Electron in a transaction valued at $68.5 million.

LLR was founded in October 1999 by real estate and venture capital investor Ira Lubert, former Legg Mason managing director Seth Lehr and former Arthur Anderson senior partner Howard Ross. The firm is part of the Independence Capital Partners family of funds, comprising LLR Partners; Quaker Bioventures, a $200 million life sciences fund; Lubert-Adler Partners, three real estate opportunity funds with $1.3 billion under management; and LEM Capital, a $150 million real estate mezzanine fund.