Ridgemont Equity raises nearly $4B in capital

Charlotte private-equity group Ridgemont Equity Partners stated it raised $3.975 billion in its fifth fund, outpacing its initial tarobtain of $2.75 billion. Its previous fund that closed in 2022 raised $2.35 billion

The partnership now manages more than $11 billion, which it typically invests in middle-market businesses.

Ridgemont stated the fund comprises more than 100 institutional investors, including sovereign wealth and pension funds, concludeowments, foundations and family offices. Principals of Ridgement have committed nearly $250 million.

“The success of this latest capital raise amidst a challenging fundraising environment further demonstrates the strength of our investment approach and strategy, the quality and cohesion of our team, and the strong alignment of interests we’ve built and sustained with our investors,” Managing Partners John Shimp and Jack Purcell stated in a release.

Ridgemont started in 1993 as the private equity arm of Bank of America. It was spun out of the bank in 2010 when rules alterd related to bank ownership of PE groups. At the time, Ridgemont managed about $1.5 billion of investments.

The PE group stated its sector specialization and “distinctive Charlotte-based culture rooted in forging strong partnerships” have enabled strong returns from its 709 company investments and more than 180 add-on acquisitions. Its North Carolina-based investments include Raleigh’s National Power and Charlotte-based Crete United.

Ridgemont focutilizes on companies in the business-services, healthcare and industrials sectors. It usually invests as much as $500 million to businesses valued at $100 million to $1 billion.

In March, two other Charlotte-based PE groups announced fundraisings. Pamlico Capital stated it attracted $1.75 billion for its sixth fund, while Falfurrias Capital Partners raised $1.35 billion. Pamlico was started in 1988 and was part of Wachovia before its sale to Wells Fargo. Former top BofA executives Hugh McColl Jr. and Marc Oken were among the founders of Falfurrias.

Raising money has become more challenging for private equity groups as corporate valuations and returns have declined amid a sluggish economy, according to the EY consulting firm. It cited Pitchbook data displaying global PE firms had closed funds valued at $223 billion during the first half of the year, on track for a 20% decline from a year earlier. The ability to raise money is now a top concern of general partners, EY stated.