A local investment company has closed out a large private equity fund after surpassing its target by about $100 million.
Private Advisors, a downtown firm that raises money from institutional investors, endowments, pension funds and more, announced Wednesday that it topped off its latest fund at $350 million, which will be put to work investing in small companies around North America.
Known as the Private Advisors Small Company Private Equity Fund VI, this latest pool is referred to as a fund of funds, which will put its money in with other investment funds that buy directly into small businesses. Those fund managers will hold their stakes in the small businesses, help the companies grow and eventually exit the investment.
Chris Stringer, head of private equity at Private Advisors, said the fund will pool money in with 17 fund managers and will ultimately look to buy into 150 to 200 small businesses. The money from such funds is typically dispensed over about five years.
This is the firm’s sixth small business private equity fund. The company has raised hundreds of millions of dollars in other funds over the years, according to Securities and Exchange Commission filings. Those include other funds of funds, as well as those that invest directly into companies.
Each one gathers money from institutional clients and focuses on investing in what’s considered alternative assets, such as small businesses, natural resources and other niche segments. One of its most recent small business buyout funds closed out in 2013 after raising $279 million, SEC filings show.
Private Advisors was founded in 1997 by Lou Moelchert, who for decades managed University of Richmond’s endowment. The firm became a subsidiary of financial giant New York Life in 2010, when New York Life purchased a 60 percent stake. It had about $4 billion in client assets under management at the time of the deal, and that figure has since risen to about $6 billion.
In addition to endowment and pension funds, its clients also include foundations and individuals with high net worth.
This latest $350 million was raised over the last 18 months. The fund was launched in January 2014 with a goal of about $250 million. Stringer said the investors are both domestic and international, including a large state pension fund, a healthcare-focused foundation and several overseas pension funds.
Private Advisors has 87 employees, including 72 in Richmond, as well as offices in New York, Cleveland and Austin. It’s headquartered at Riverfront Plaza at 901 E. Byrd St.