Reuters: Private Equity: BUYOUTS-Denver LBO firm returns $800M to investors

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BUYOUTS-Denver LBO firm returns $800M to investors Mar 21st 2012, 22:04 Wed Mar 21, 2012 6:04pm EDT * Four exits in less than three months * Paves way for new fundraise * Sets good example for cash-hungry peers By Bernard Vaughan NEW YORK, March 21 (Reuters-BUYOUTS)-KRG Capital Partners has been on a selling spree in recent months, putting the Denver-based buyout firm in a promising position to raise its fifth investment fund. All told, the firm has sold investments in four companies since mid-December, returning more than $800 million to backers. Over the years, investors in KRG funds have included California Public Employees' Retirement System, Canada Pension Plan Investment Board and New York State Common Retirement Fund, according to Dow Jones. The firm's recent exits include the January sale of PetroChoice, a Riddlesburg, Pennsylvania-based supplier of commercial, industrial and automotive lubricants, to another private equity firm, Greenbriar Equity Group LLC; and its sale in December of Avizent, a Dublin, Ohio-based provider of insurance claims and risk management services, to York Risk Services Group Inc. In its most recent exit, on March 12, KRG Capital sold Tronair Holdings Inc., a manufacturer of jacks, tow bars and other aircraft ground support equipment, for an undisclosed amount to Levine Leichtman Capital Partners, a private equity firm that manages approximately $5 billion. By returning so much money in such a short period of time, KRG Capital is setting a lofty example for other private equity firms, which typically buy companies and try to improve them over a three- to five-year holding period before selling or taking them public. Many private equity firms, which raise funds every five or so years, are just about out of money. At the beginning of this year Buyouts Magazine, published by Thomson Reuters, counted at least 38 firms expected to try to test the fundraising market in 2012. Altogether, these firms raised more than $94 billion for their previous funds. "There are a ton of in the market now because they have to be," said Kelly DePonte, a partner with Probitas Partners, a firm that helps private equity shops raise money, in a January interview. "They've got to come back to market simply because they're running out of money to invest." Pensions, endowments and other investors in private equity funds have gotten a lot pickier following the financial downturn. That means there is even more pressure for firms to generate strong returns on companies they've bought in recent years. Founded in 1996, KRG Capital seeks to buy companies generating $10 million to $100 million of EBITDA. It invests in several sectors, including health care, industrials, manufacturing, energy, packaging, aerospace and defense. KRG Capital's fourth and most recent fund, a $1.96 billion pool closed in 2007, is now 70 percent committed. That means the firm will likely be hitting the fundraising trail relatively soon. Fund IV can support two to three more new investments. KRG Capital executives declined to comment. Link this Share this Digg this Email Reprints

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