(Reuters) - LightBay Capital, a private equity firm founded by two former Ares Management LP (ARES.N) executives, said on Thursday it had raised $615 million for its inaugural fund, exceeding its fundraising target.
LightBay had initially aimed for $450 million but pulled in just over a third more, with funds coming from family offices, foundations, funds of funds, insurers and pension plans.
Los Angeles-based LightBay was founded by Nav Rahemtulla and Adam Stein, who had respectively led Ares’ healthcare, and consumer and retail industry groups.
Marketing for the new fund officially began in April. One person familiar with the fundraising said there had been significant demand from investors that Rahemtulla and Stein knew from their time at Ares, which was founded in 1997 and had approximately $106 billion in assets under management at the end of September.
LightBay targets smaller investments - between $25 million and $150 million - primarily in the consumer, healthcare and business services sectors through leveraged buy-outs and shared-control investments.
It also looks at so-called special situations, which are brought about through corporate events such as bankruptcies.
“The flexibility of our capital base enables us to invest in high-quality companies in all market environments, and our strategy is well suited to take advantage of the disruption occurring across the consumer, healthcare, and business services sectors,” Stein said in a statement.
Investors have been increasingly eager to put a portion of their money with private equity firms, which traditionally buy companies and then sell them on a few years later in the hope of generating higher returns than in public markets.
Aggregate capital raised by private equity firms in the first nine months of 2017 increased to $338 billion from $286 billion a year earlier, according to market research firm Preqin.
Reporting by Joshua Franklin; Editing by James Dalgleish