Southlake, Texas-based insight equity closed its first fund on $250 million, according to Ross Gatlin, a managing director and chief restructuring officer at the firm.
Academic endowments and trusts invest in the fund. Insight hired UBS to help raise the fund.
"We weren't going to raise money unless it was with a group we trusted and a set of LPs we believed in for the long haul," Gatlin said. "We did our first investor meetings last October."
The partners at Insight committed to contribute up to 10% of the fund, Gatlin added. The partners also have the ability to increase their contributions to the fund as exits are made.
Gatlin said investors wanted to see if Insight could do what they said. That's why the firm's investments in specialty refining and fuel terminal operation Direct Fuels and ophthalmic lens manufacturer Vision-Ease Lens were so critical. Those deals were sourced, structured and financed independently.
"That's what demonstrated our ability to the investor base," Gatlin said. "We also have a differentiated strategy. We invest in asset-intensive, under-performing businesses that are strategically viable."
Insight then becomes heavily involved in the management and operations of the business in order to rapidly grow revenue and cash flow. Insight is especially interested in investing in the basic manufacturing, automotive, transportation, energy, consumer goods, defense and aerospace industries. The firm plans to make three to five acquisitions of North American-based companies in the next 18 months.
Two former Carlyle Management Group executives and a former Bain & Co. executive formed insight equity in 2002. The firm is led by managing partners Ted Beneski and Gatlin, both former Carlyle Management Group founders and principals, and Victor Vescovo, a former principal at Bain & Co.