Solera Capital LLC made news last year when the 14-year-old firm took portfolio company Annie's Inc. public in one of the hottest IPOs of the year.
But Solera, a woman-owned, middle-market private equity firm, is now raising its second fund and investors are taking their time to make allocations. Solera Partners II has a $350 million fundraising target and a $500 million maximum fundraising limit.
If Solera's experience is consistent with similar firms that started around the same time, it should have a fighting chance.
Seventy-six percent of U.S. middle-market buyout funds that raised their first funds in 2000 went on to raise a second fund that was as large or larger than their first fund, according to Preqin, a London-based alternative investment research firm. By comparison, 73% of all first-time private equity funds worldwide successfully raised another fund. Preqin's definition of middle-market buyout for 2000 vintage buyout funds is funds with total capital of $300 million to $750 million.
Only 15% of U.S. middle-market private equity buyout firms that raised their first funds in 2000 have not raised another fund, compared with 20% of all private equity firms that raised their first fund a dozen years ago.
Preqin's research team could not determine when these general partners went out of business, switched to another strategy or began raising capital on a deal-by-deal basis.
“Some buyout firms likely closed their doors before the 2008 financial crisis since the fundraising for a cycle for a (general partner) is typically every three to four years, and they may not have been able to raise a successor fund in that time,” said Richard Stus, manager of private equity fund data at Preqin, in an e-mailed response to questions.