Marlin Equity Partners raked in $1.6 billion for its fourth fund, an effort that was more than three times oversubscribed and handily beat the original $1 billion target in less than five months, the Los Angeles-based firm said on Tuesday.
Investors from around the world committed to the fund, creating a base that covers sovereign wealth funds, pension funds, endowments and insurance companies, among others, Marlin Equity said, without specifically naming backers.
The haul is a threefold increase over the firm's previous fund, a $660 million pile raised in 2009, and an even steeper improvement over its debut fund, which drew just $64 million in 2005. News reports earlier this year hinted that Marlin Equity could lift the cap for its latest fund as high as $2 billion, but the firm opted to stick to its already-sweetened goal.
The fund's close comes after a particularly active span for Marlin Equity, a $2.6 billion turnraround specialist that primarily invests in distressed middle-market companies. Since January 2012, the firm has scooped up more than 15 businesses, including six units spun out of corporations, and exited five previous investments through sales to strategic buyers.
With the fresh backing, Marlin Equity said it plans to dig deeper into industries where it has already established itself as an investment force, including technology, business services, health care and manufacturing, plus others.
"We are pleased with the extraordinary level of support that we received from such a prestigious group of global investors," Marlin Equity Managing Partner David McGovern said in a statement. "The successful fund-raise is a clear endorsement of our operationally focused investment strategy and reflects our ability to deliver superior returns to our investors and partners."
The strong finish to the fourth fund extended Marlin Equity's run toward the top of the middle-market private equity sector. Over the past three years, the firm has more than doubled its assets under management to hit the $2.6 billion mark — an achievement that, in a tough economy for fund-raising, signals its powerhouse potential, the firm said.
Driven by investor interest and success in its existing portfolio companies, Marlin Equity has also stretched its reach across the world, recently establishing a London office to beef up its European presence.
One of Marlin Equity's most notable deals this year came in February, when it took Sycamore Networks Inc. private in an $18.8 million deal to close out a liquidation plan that ended the Massachusetts company's disastrous public run that saw its market value plummet from an all-time high of $14 billion.
The private equity firm bought Sycamore's bandwidth management and service business, which handles networking and caters to fixed-line and mobile networks worldwide, as well as a development office in Shanghai.
When Sycamore went public in October 1999, just before the Internet bubble popped, its stock closed its first trading day at nearly five times its initial price, sending the company's worth skyward. It went on to take its biggest hits in 2001 and 2002, according to earnings reports, ultimately opening the door to Marlin Equity's takeover.
Marlin Equity is represented in its fund-raising effort by Bruce Ettelson and Karin Orsic of Kirkland & Ellis LLP.
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