NEW YORK, March 3, 1997 -- Castle Harlan, Inc., the New York merchant bank, announced today the closing of its third private equity investment partnership with commitments of $610 million.
The investors include public and private pension funds, private foundations, college endowments and affluent individuals, said Castle Harlan Managing Director Jeffrey Siegal, who spearheaded the fundraising.
"We see it as a real vote of confidence for Castle Harlan," he said, "that more than 85 percent of the investors in the new fund were participants in our earlier funds."
He said the commitments were obtained in an unusually short time. The fund was oversubscribed by more than $100 million after it was capped at $610 million.
Among the participants in the fund are the pension funds of the States of Oregon, Michigan and New Hampshire, corporations such as NYNEX, American Airlines and Amoco, and endowments such as the Massachusetts Institute of Technology and Brown University. All except Michigan had invested in previous Castle Harlan partnerships.
Castle Harlan was founded in 1987 by John K. Castle, former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm, and a pioneer in private equity limited partnership investing, and Leonard M. Harlan, founder and former chairman of The Harlan Company, a real estate investment and financial advisory firm.
Castle Harlan Partners II, the most recent prior fund which is now fully invested, was established in 1992 with capital of more than $275 million. Through December 31, 1996, it had earned a compound annual return of approximately 82 percent, placing the fund among the best performers in the corporate buyout industry.
Since its founding, Castle Harlan has acquired companies valued at more that $3 billion. Investments have included Delaware Management Company, a major international money-management firm with assets of more than $32 billion; Indspec Chemical Corp., a specialty chemical company; Smarte Carte, the airport baggage rental company; and MAG Aerospace Industries, Inc., the world's leading manufacturer of aircraft sanitation systems.
More recently, Castle Harlan Partners II acquired Statia Terminals Group, N.V., one of the world's largest independent marine terminal companies; Commemorative Brands, Inc., the second largest manufacturer of class rings in the United States; and U.S. Synthetic Corporation, the leading manufacturer of synthetic diamond drill bits for the oil and gas industry. It also signed a definitive agreement to sell McCormick & Schmick's, operator of 16 upscale seafood restaurants, primarily in the western United States, and assisted MAG Aerospace in the acquisition of the leading supplier of trash compactors for commercial aircraft.
Since its inception, Castle Harlan has worked intensively with the managements of its portfolio companies to promote their growth. Examples include Morton's Restaurant Group, owner of the Morton's of Chicago steakhouses, which operate in major cities throughout the country, and Ethan Allen Interiors, one of the best known names in furniture.