American Securities LLC plans to seek about $4 billion for a private-equity fund after its last two pools gathered since 2008 exceeded 25 percent annual returns, according to two people with knowledge of the matter.
The New York-based firm, which is led by Michael Fisch and started out as a family office managing part of the fortune from Sears, Roebuck & Co., expects to start raising capital for its seventh fund after Sept. 1, said the people, who asked not to be named because the information is private.
Buyout firms are raising the most capital since 2008 as institutions, including pension funds, that have benefited from a rising stock market and robust distributions seek to commit more to private equity. About one-third of investors increased their target allocations over the past two years compared to 17 percent that scaled back, according to a survey conducted this year by Coller Capital Ltd., which buys private-equity stakes from original investors.
Nicholas Rust, a spokesman at Prosek Partners, declined to comment on behalf of American Securities, which began as a family office in 1947, later transforming into a private-equity manager under Fisch and Charles Klein in 1994. Both were previously financial advisers to the William Rosenwald family. William’s father, Julius, was Sears, Roebuck’s part owner and president early in the last century.
American Securities is seeking to increase the size of the next fund by at least 11 percent from its $3.6 billion pool gathered in 2012. The prior fund generated a 28.1 percent net internal rate of return as of Dec. 31, according to data compiled by Bloomberg. The firm’s 2008 fund produced a net IRR of 28.2 percent as of year-end, the data shows. That places the funds in the top 25 percent, the data show.
In July, American Securities sold Healthy Directions LLC, a retailer of nutritional supplements and skincare products, to Helen of Troy Ltd. for about $195 million.
American Securities, with more than $8 billion in assets under management, invests in companies with $500 million to $2 billion in revenue, according to the firm’s website. It targets various industries including industrial, health care, power and energy, services and consumer.
The firm in June agreed to purchase Emerald Performance Materials LLC, a producer of specialty chemicals, from an affiliate of Sun Capital Partners Inc. It also bought Grede Holdings LLC, an iron casting supplier, from Wayzata Investment Partners LLC.
American Securities in June raised $1 billion for a fund to buy the securities of companies that may be stressed or facing operational or financial challenges.
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