Specialty Chemicals Focused Arsenal Capital Raises Latest Fund with $1.3B

Arsenal Capital Partners, a New York-based private equity firm that invests in lower middle market specialty industrial and healthcare companies, has announced that it has successfully completed fundraising for Arsenal Capital Fund IV LP (“Fund IV”) at its $1.3 billion hard cap. The firm’s previous fund, Arsenal Capital Partners III LP, was raised in 2012 with $875 million of committed capital.  Since inception in 2000, Arsenal has raised institutional equity investment funds totaling $2.975 billion.

Commenting on the firm’s fundraising success, Terrence Mullen, Co-founder and Partner at Arsenal, said, “We are delighted to have received the support of such a terrific group of leading global institutional investors. We are thankful for the wonderful long-standing commitment of our existing investors and for the trust new investors placed in our team and investment strategy. We are very gratified by the investors’ strong vote of confidence in the institutional quality of our firm, our leading franchises in specialty industrials and healthcare, and our track record of building high growth, high value-added companies.”

Jeffrey Kovach, Co-founder and Partner at Arsenal, said, “The demand for Fund IV is a testament to the talented and experienced team of 33 professionals that we have built and honed over 16 years, and our strong culture of teamwork and collaborative value creation.  Our uncommon balance of investment, industry and operating talent, working in unison, enables us to be a partner of choice with management teams seeking to achieve differentiated strategic positioning with enhanced capabilities in growth, technology and operations.  The Arsenal high-growth, buy and build strategy and model continue to win in the market, as evidenced by the 34 platform investments and 21 realizations completed since inception, generating excellent returns for our investors.”

Bill Farrell, Head of Investor Relations for Arsenal, said, “Arsenal’s leading market positions in technology-rich industrials, such as specialty chemicals and specialty materials, and technology-enabled business services to healthcare resonated with existing Arsenal investors and attracted a high quality group of new investors to Fund IV.”

Over 85% of existing institutional investors re-upped in Fund IV. The Fund’s investor base is international in scope, with approximately 60% of the institutional capital coming from the United States and the balance from Europe and Asia.  The investor base represents leading endowments and foundations, public and corporate pension plans, financial institutions and family offices.   Existing investors in Arsenal that re-upped for Fund IV include The Regents of the University of California, Northwestern Mutual, PPM America, The Eli and Edythe Broad Foundation, PKA AIP A/S, Pictet Alternative Advisors SA, SAMpension, and Unigestion SA. New institutional investors in Arsenal Fund IV include California State Teachers’ Retirement System (CalSTRS), PensionDanmark, and Sentry Insurance.

Arsenal was assisted by Kirkland & Ellis LLP as legal counsel.