JLL Partners Closes 4th Fund
New York, N.Y. — Concluding a laborious fund-raising effort in an inhospitable market, JLL Partners said Monday, Nov.18, it had clinched $750 million in commitments for JLL Partners Fund IV LP.
The 14-year-old New York private equity firm, which recently changed its name from Joseph Littlejohn & Levy, came up short of the $1 billion-plus that it had aimed to amass when it began soliciting money in early 2000. “It’s been a rough, rough environment,” said Paul Levy, JLL’s senior managing partner. “The market has been terrible and a lot of the large pension funds haven’t [performed] well.”
Merrill Lynch & Co. was JLL’s placement agent for the new fund.
JLL’s previous vehicle, Joseph Littlejohn & Levy Fund III LP, corralled $1 billion in 1998. Levy suggested that many pension funds have consolidated their private equity commitments with larger, brand-name players.
But even though some of JLL’s existing investors didn’t re-up, the firm still managed to get “a lot of money” from some university endowments that Levy declined to identify.
“We got a bunch of new limited partners, endowments that told us they didn’t like their experience with the bigger funds,” Levy said optimistically. “We’re hanging in and pushing along.”
Like many of its middle-market peers, JLL has been hurt by the troubled economy. In particular, its $118 million investment in Hayes Lemmerz International Inc., a supplier of wheels and brake components to automakers, evaporated when Hayes filed for Chapter 11 in December.
Hayes was JLL’s biggest loss ever. But Levy said the firm’s other investments are holding fast. He singled out Iasis Healthcare Corp., a hospital management concern; bus maker Motor Coach Industries International Inc.; and building products distributor Builders FirstSource as solid performers.
JLL’s last major investment, a $150 million infusion in drug-benefits provider AdvancePCS in October 2000, has performed especially well, generating realized and unrealized gains of more than 150%. Since the firm’s launch, JLL has produced average annual returns of about 30%, according to Levy.
Former partners Peter Joseph and Angus Littlejohn departed the firm some years ago.
Levy opined that while he doesn’t foresee the gloom that envelops the economy dissipating soon, he does expect JLL’s pace of investing to pick up.
“The weak economy has discouraged investing. Putting money into companies now can be like trying to grab a falling knife,” Levy said.
“But we expect to see opportunities to invest in good companies that are overleveraged. A lot of them have debt that will mature soon, and we can help them with their balance sheets.”
© Copyright 2012 JLL Partners