Private equity firm GTCR LLC has raised its largest fund ever, collecting $11.5 billion from investors to acquire companies that span the technology, healthcare, financial and consumer services sectors, it told Reuters on Tuesday.
The milestone defies fundraising challenges private equity funds are facing as investors avoid risk and hoard cash, fearing an economic slowdown.
U.S. buyout fundraising has reached $72 billion across 60 funds so far this year compared with $109.4 billion raised in nearly 100 funds over the year-ago period, according to London-based investment data provider Preqin.
"Our limited partners tell us that they don't have the resources to support as many general partner relationships and they will focus on their longest-term, quality relationships," GTCR co-Chief Executive Collin Roche said in an interview.
The new fund, GTCR Fund XIV, initially aimed to raise $9.25 billion. It amassed $11 billion from institutional investors, including from sovereign wealth funds, public and private pension funds, foundations and endowments. An additional $500 million was committed by GTCR employees, Roche said.
The new fund is larger than its predecessor, GTCR Fund XIII, which had collected $7.9 billion from investors in 2020.
That fund generated a net internal rate of return (IRR) of nearly 194% as of December last year, according to data from the Alaska Retirement Management Board (ARMB), an investor. GTCR's $5.4 billion Fund XII and the $4 billion Fund XI generated IRRs of about 36% and about 39%, respectively, the data showed.
Some of GTCR's fund investments include U.S. vaccine reagent vendor Maravai Life Sciences Holdings (MRVI.O), in-flight internet provider Gogo Inc (GOGO.O), and ticketing company Vivid Seats Inc (SEAT.O). In 2021, GTCR partnered with buyout firm Reverence Capital Partners to acquire the asset management business of Wells Fargo & Co (WFC.N) for $2.1 billion.
"In more than half of our deals, we find what we believe are the best talents in any particular industry we're working in and then go find businesses and assets for those leaders to build and transform," said GTCR co-CEO Dean Mihas.
Chicago-based GTCR was founded in 1980 and has more than $35 billion in assets under management across business services, media, telecoms, healthcare, technology, financial and consumer services sectors.
