Local private equity firm raises $365M for investment fund

One of the state’s largest private equity firms has finished raising $365 million for its biggest investment fund to date and already has taken controlling stakes in five firms.

Hammond Kennedy Whitney & Co. Inc., based in Indianapolis with an office in New York City, finalized its latest investment pool on Aug. 30, it announced Friday. The fund launched in September 2017.

HKW’s typical modus operandi is to take controlling stakes in lower middle-market firms that it believes have the potential for strong growth, with an emphasis on the business services, infrastructure and health-and-wellness sectors.

It usually invests in North American companies that report between $20 million and $200 million in annual revenue and $5 million to $30 million in earnings before interest, taxes, depreciation and amortization.

Dubbed HKW Capital Partners V, the new fund follows in the footsteps of HKW IV, a $319 million private equity find that began investing in 2012. It wrapped up with 15 investments.

Under HKW V, the firm has taken a controlling stake in five companies so far:

—Urban Armor Gear, a maker of protective gear for consumer electronics based in Laguna Niguel, California.

—GCR, a professional services firm based in New Orleans, Louisiana.

—Indigo Wild, a maker of bath, skin and other cleaning products based in Kansas City, Missouri.

—Certified Tracking Solutions, a Canada-based firm specializing in GPS tracking for vehicle fleets and other telematics.

—Fresh Direct Produce, a Canada-based distributor of fresh, ethnic, tropical, organic and specialty produce.

Historically, HKW’s strategy has been to spend four to five years investing capital of a new fund, and then to maintain its stakes in individual companies for three to five years before divesting.

Investors in HKW V included insurance companies, state pension plans, high net worth individuals, and foundations and endowments. Some participated in previous funds.

“In particular, having previous investors continue supporting our partnership is an important validation of our strategy and approach.,” said Ted Kramer, CEO of HKW.