Hellman & Friedman targeting as much as $16 bln for Fund IX

Hellman & Friedman will likely target $15 billion to $16 billion for its ninth flagship fund, according to two limited partners with knowledge of the fundraising.

The GP is expected to chip in another $1 billion to the fund, one of the LP sources said.

Hellman & Friedman is in the early stages of pitching the fund to investors, having secured a $200 million commitment from Minnesota State Board of Investment earlier this month.

A Minnesota memo said it was unclear how much Hellman & Friedman expected to raise from the vehicle, though several sources have said LP demand for the fund will be significant.

The firm wasn’t expected to formally return to market until later this year. Two separate LP sources said they expected Hellman & Friedman to market the fund more broadly in May, around the time of its annual meeting.

Hellman & Friedman’s previous flagship fund closed on $10.9 billion in 2014. Fund VII raised $8.8 billion during the difficult fundraising period following the global financial crisis and was netting a 25 percent internal rate of return as of Sept. 30, according to the Minnesota memo.

Rising valuations and a favorable fundraising environment contributed to many large buyout firms increasing the size of their funds in recent years.

Apollo Global Management closed its most recent buyout fund on $24.6 billion last year, the largest-ever traditionally structured private equity fund. Blackstone Group’s 2015 vehicle raised $18 billion, a nearly 20 percent increase from the $15.2 billion it raised through its previous buyout fund.

Hellman & Friedman invests in large buyouts and its new fund could commit as much as $1 billion of equity to each new deal, according to the Minnesota memo.

Likely investment targets include businesses in the software, financial services, media, business and information services, healthcare, insurance, retail, consumer, and energy and industrial sectors.

The firm recently led a consortium that included Advent International, Bain Capital and GIC Private Ltd to acquire Danish payments company Nets A/S for roughly $5.3 billion. Hellman & Friedman’s offer was formally accepted by the Nets board in February.

Hellman & Friedman was founded in 1984 by the late Warren Hellman and Tully Friedman. The firm is based in San Francisco with offices in New York and London.

Hellman & Friedman did not respond to requests for comment.

Action Item: For more on Hellman & Friedman, visit www.hf.com

The western span of the San Francisco-Oakland Bay Bridge on Feb. 14, 2018. Photo by Sam Sutton, Buyouts.