SKM spinoff raises $230m fund

Dallas-based Parallel Investment Partners will invest in recapitalizations and opportunistic buyouts with its second fund.

Parallel Investment Partners has closed its second fund, the Parallel 2005 Equity Fund, at $231 million (€179 million).

Parallel was formerly known as SKM Growth Investors until it re-named itself in August 2005. The firm was formerly the mid-market arm of private equity firm Saunders Karp & Megrue, and became independent when that firm merged with Apax Partners in April 2005. Parallel is still working with Apax to invest the fund’s remaining capital, as well as manage investments from SKM’s third fund.

Parallel will use the fund to invest in recapitalizations, growth-capital investments and opportunistic buyouts. The firm has announced three investments in 2006, including specialty home improvement retailer Weisman Discount Centers; sports media production company Wintercomm and casual dining chain Marmalade Café & Catering Company. The firm recently completed the successful realizations of Environmental Lighting Concepts and Personnel Concepts, which together brought a more than 3 times return to investors.

With the new fund, Parallel now manages approximately $400 million in capital commitments. The firm had been part of SKM since 1999, and during that time it pursued a similar strategy. Barron Fletcher, the firm’s managing director, founded the growth investment partnership with SKM to expand into the small-company buyout market.