Peterson Partners Just Raised $265 Million for Fund X of its Peterson Private Equity Unit
When Peterson Private Equity takes on a new portfolio company, its deployed capital falls into one of three categories: 1) Growth Investments, 2) Co-Investments, or 3) Complete Buy-Outs.
Salt Lake City, Utah-based Peterson Partners is a 28-year-old investment firm that has invested in over 300 firms and presently has $2.0 billion in Assets Under Management (AUM)
Salt Lake City, Utah-based Peterson Partners has just closed a $265 million fund within its Peterson Private Equity unit.
According to the company news release announcing its latest fund (known as Fund X), this $265 million pool "... is focused on investing $10-25 million (each) behind entrepreneurs and management teams in profitable and growth-oriented companies."
As published by PE Hub, Peterson Private Equity's Fund IX raised $225 million and was closed in February 2021.
Following his successful role as Managing Partner of Trammell Crow Company (where he helped build it into a multi-billion-dollar enterprise as its Managing Partner), Joel Peterson formed his namesake investment firm — Peterson Partners — in 1996.
[NOTE: He has also served as a Consulting Professor for Stanford's Graduate School of Business for over 32 years.]
Since then, Peterson Partners has invested in over 300 firms across three separate business units:
- Peterson Private Equity,
- Peterson Ventures, and
- Peterson Search.
As noted in its announcement, Peterson Private Equity has already deployed capital from Fund X into three firms:
- Dura Software – a San Antonio, Texas-based software aggregator of niche B2B SaaS companies;
- Salt Lake City-based Packsize – a sustainable, smart packaging provider for e-commerce and retailers; and
- Kelso – a Phoenix, Arizona-based leader in commercial mechanical, electric, and plumbing services.
With the $265 million in Fund X, Peterson Private Equity expects to invest in approximately 12 firms over the life of the fund.
As Clint Peterson, Managing Partner of Peterson Partners said,
“We are grateful for the active support of our investors, many of whom have been with us for more than twenty years, and many of whom have also been CEOs with us.”
Firms targeted by Peterson Private Equity tend to fall into one of five industry sectors:
- Business Services,
- Consumer/Retail,
- Healthcare,
- Internet/Software, or
- Transportation/Industrial.
Such firms are generally producing revenue of $5 million to $100 million per year, with annual Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2 million to $20 million.
When it completes transactions with targeted enterprises, Peterson Private Equity's transactions fall into 1 of 3 different approaches:
- Growth Investments (designed to, obviously, accelerate firm growth),
- Co-Investments (where it invests alongside one or more investment partners), or
- Complete Buy-Outs (where it acquires 100% of a new portfolio company).
As of today, Peterson Partners has over $2.0 billion in Assets Under Management (AUM).
Noting a Few Notable Successes
In my opinion, some of Peterson Private Equity's more notable prior portfolio companies of include
- West Valley City, Utah-based 3form (just acquired by Armstrong World Industries);
- Azul Airlines (one of five commercial airlines started by prominent Utah businessman, David Neelman);
- Murray, Utah-based Blue Raven Solar;
- North Salt Lake, Utah-based Handi Quilter;
- Orem, Utah-based MityLite;
- Sandy, Utah-based My Hearing Centers;
- Salt Lake City-based ShipEx; and
- Provo, Utah-based Vivint and Vivint Solar,
among others.
That said, I'm curious to see where Peterson Private Equity deploys the balance of Fund X in the months and years ahead.
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