Sterling Group closes $470m fund

The Houston-based private equity shop has closed its second fund on $470m, including a $20m commitment from the firm’s principals.

The Sterling Group has closed its second private equity fund on $470 million (€375 million), surpassing its reported target of $350 million. The fund will continue the strategy developed with the first fund, focusing on middle-market companies in the industrial services, manufacturing and distribution sectors.

Investors in the fund include AXA Private Equity, BNP Paribas, BOKF Private Equity, CSFB, Dankse Private Equity, Hoegh Capital Partners, INVESCO Private Capital, The Meadows Foundation, Montreal Transit Workers, RCP Advisors, Standard Life Investments, Swiss Re Private Equity Partners and Texas Tech University. The principals at Sterling also contributed $20 million to the fund.

“Our success in raising fund II is strong validation of our investment philosophy—hands-on involvement in our portfolio companies and a focus on difficult transactions where we can make a real difference,” Frank Hevrdejs, co-founder and principal at Sterling, said in a statement.

Our success in raising fund II is strong validation of our investment philosophy—hands-on involvement in our portfolio companies and a focus on difficult transactions where we can make a real difference.

Frank Hevrdejs, co-founder & principal, The Sterling Group

Sterling Partners I, a vintage 2001 fund, closed on $120 million and is now fully invested. In 2004, the fund invested in packaging concern Exopack, chemical company HydroChem, mining services provider North American Energy Partners and carpet backing manufacturer Propex.

The firm was founded in 1982 by Hevrdejs and the late Gordon Cain. It has made 29 platform investments.