CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
HARROWGATE PRIVATE EQUITY FUND V LP
A Delaware Limited Partnership
$2,000,000,000
Limited Partnership Interests
May 1, 2025
Target Fund Size: $2,000,000,000 (Hard Cap)
Minimum LP Commitment: $10,000,000 (subject to waiver by the General Partner)
General Partner: Harrowgate Fund V GP LLC, a Delaware limited liability company
Sponsor / Investment Adviser: Harrowgate Capital Partners LLC, a Delaware limited liability company, registered as an investment adviser with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended (SEC File No. 801-79223; CRD No. 298417)
Fund Counsel: Calderwood & Harkness LLP, 400 South Ashbury Asset Advisors, Suite 3000, Wilmington, DE 19801
Placement Agent: Osprey Capital Markets LLC, 599 Lexington Avenue, 35th Floor, New York, NY 10022
The limited partnership interests (the "Interests") described herein are being offered and sold in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506(b) of Regulation D promulgated thereunder. The Fund will rely on the exclusion from registration as an investment company under Section 3(c)(7) of the Investment Company Act of 1940, as amended (the "Investment Company Act"). Accordingly, all investors must be "qualified purchasers" as defined in Section 2(a)(51) of the Investment Company Act.
THE LIMITED PARTNERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM REGISTRATION. THE INTERESTS MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
AN INVESTMENT IN THE FUND INVOLVES A HIGH DEGREE OF RISK, INCLUDING THE RISK OF LOSS OF THE ENTIRE INVESTMENT. PROSPECTIVE INVESTORS SHOULD CAREFULLY REVIEW THE "RISK FACTORS" SECTION OF THIS MEMORANDUM BEFORE MAKING AN INVESTMENT DECISION.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS MEMORANDUM, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND, THE GENERAL PARTNER, THE SPONSOR, OR THE PLACEMENT AGENT.
This memorandum is being furnished on a confidential basis to a limited number of qualified purchasers for the sole purpose of evaluating an investment in Harrowgate Private Equity Fund V LP (the "Fund"). This memorandum may not be reproduced or distributed, in whole or in part, without the prior written consent of Harrowgate Fund V GP LLC (the "General Partner"). By accepting this memorandum, each recipient agrees to maintain the confidentiality of all information contained herein and to return or destroy all copies of this memorandum and any related materials upon the request of the General Partner. The delivery of this memorandum does not, under any circumstances, create any implication that the information contained herein is correct as of any date subsequent to the date hereof.
Right-click to update Table of Contents
I. IMPORTANT NOTICES AND DISCLAIMERS
A. Confidentiality
This Confidential Private Placement Memorandum (this "Memorandum" or "PPM") is being furnished on a strictly confidential basis solely to prospective investors who are "qualified purchasers" as defined in Section 2(a)(51) of the Investment Company Act of 1940, as amended (the "Investment Company Act"), for the sole purpose of evaluating an investment in limited partnership interests (the "Interests") of Harrowgate Private Equity Fund V LP, a Delaware limited partnership (the "Fund"). This Memorandum is not intended to constitute an offer to sell, or a solicitation of an offer to buy, any securities to any person other than a prospective qualified purchaser to whom it has been directly furnished by the General Partner, the Sponsor, or the Placement Agent.
By accepting this Memorandum, each recipient hereby agrees, for the benefit of Harrowgate Fund V GP LLC (the "General Partner") and Harrowgate Capital Partners LLC (the "Sponsor" or "HCP"), (i) to maintain the strict confidentiality of all information contained in this Memorandum and any related documents, notes, analyses, or other materials (collectively, "Confidential Materials"), (ii) not to reproduce, distribute, transmit, or disclose any Confidential Materials to any person other than the recipient's professional advisors (legal, tax, financial, or accounting) who have agreed to keep such information confidential, and (iii) upon request by the General Partner, to promptly return or destroy (and certify such destruction of) all copies of the Confidential Materials in the recipient's possession or control. The recipient further agrees not to use the Confidential Materials for any purpose other than evaluating an investment in the Fund.
Notwithstanding the foregoing, nothing in this Memorandum shall restrict a prospective investor from disclosing the tax treatment or tax structure of the transactions described herein to the extent required by applicable law or regulation, or from disclosing information to the extent necessary to comply with applicable legal, regulatory, or judicial process.
B. Forward-Looking Statements
This Memorandum contains certain forward-looking statements regarding, among other things, the Fund's investment strategy, target returns, anticipated market opportunities, fund economics, and the Sponsor's expectations with respect to prospective portfolio investments and value creation. Forward-looking statements are typically identified by words such as "may," "will," "expect," "anticipate," "believe," "estimate," "intend," "plan," "project," "target," "seek," or similar expressions, as well as by the context in which they are used. These statements are based on current expectations, assumptions, and projections of the General Partner and the Sponsor and are inherently subject to significant risks, uncertainties, and contingencies, many of which are beyond the control of the General Partner and the Sponsor.
Actual results, performance, or outcomes may differ materially from those expressed or implied by any forward-looking statement. Among the factors that could cause actual results to differ materially are general economic and market conditions, interest rate environments, competitive dynamics, regulatory changes, the availability and pricing of acquisition targets, the ability to achieve anticipated value creation, and other factors described in the "Risk Factors" section of this Memorandum. Past performance of the Sponsor's predecessor funds (HPE Funds I–IV) is not indicative of future results, and there can be no assurance that the Fund will achieve results comparable to those of prior funds.
Prospective investors should not place undue reliance on any forward-looking statement. Neither the General Partner nor the Sponsor undertakes any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required by applicable law.
C. No Offer in Restricted Jurisdictions
This Memorandum does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction in which such offer or solicitation would be unlawful. The Interests are being offered only in jurisdictions where such offering may be lawfully conducted and only to persons who meet all applicable investor qualification requirements, including the requirement to be a "qualified purchaser" under the Investment Company Act and an "accredited investor" under Regulation D of the Securities Act. It is the responsibility of each prospective investor to satisfy itself as to full observance of the laws of any relevant jurisdiction in connection with any subscription for Interests, including obtaining any governmental or other consents that may be required and observing any other formalities that may need to be observed.
No action has been taken in any jurisdiction outside the United States that would permit an offering of the Interests, or the distribution of this Memorandum, in any jurisdiction where action for that purpose is required. Accordingly, this Memorandum may not be used for the purpose of, and does not constitute, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized, or to any person to whom it is unlawful to make such offer or solicitation.
D. Reliance
Prospective investors should rely solely on the information contained in this Memorandum, the Agreement of Limited Partnership of the Fund (the "Limited Partnership Agreement" or "LPA"), the applicable Subscription Agreement and Investor Questionnaire, and such other materials as the General Partner expressly provides in writing. No person has been authorized by the Fund, the General Partner, the Sponsor, or the Placement Agent to provide any information or to make any representations other than those contained herein. If given or made, such other information or representations must not be relied upon as having been authorized by the Fund, the General Partner, the Sponsor, or the Placement Agent, and none of such persons shall have any liability in respect thereof.
Each prospective investor is urged to consult its own independent legal, tax, financial, and accounting advisors before making an investment decision. An investment in the Fund is suitable only for sophisticated investors who are able to bear the economic risk of their investment for the full term of the Fund and who have no need for liquidity with respect to their investment.
This Memorandum is qualified in its entirety by the more detailed provisions of the Limited Partnership Agreement, which will govern the rights and obligations of the Limited Partners and the General Partner. In the event of any conflict or inconsistency between this Memorandum and the Limited Partnership Agreement, the Limited Partnership Agreement shall control.
E. Accuracy and Updates
The information contained in this Memorandum is current as of and speaks only as of such date unless otherwise noted. The General Partner reserves the right, in its sole discretion, to update, amend, or supplement this Memorandum at any time prior to the Final Close. Any such updates, amendments, or supplements will be furnished to prospective investors who have received this Memorandum. Notwithstanding the foregoing, neither the General Partner nor the Sponsor assumes any obligation to update any forward-looking statement or any other information contained in this Memorandum as a result of new information, future events, or any other reason.
The delivery of this Memorandum at any time does not create any implication that there has been no change in the affairs of the Fund, the General Partner, or the Sponsor since the date hereof. Information from third-party sources has not been independently verified by the General Partner, the Sponsor, or Fund Counsel, and no representation is made as to the accuracy or completeness of such information.
II. EXECUTIVE SUMMARY
The following is a summary of the principal terms and conditions of the offering described in this Memorandum. This summary is qualified in its entirety by the more detailed information contained elsewhere in this Memorandum and by the terms of the Limited Partnership Agreement. Prospective investors should read the entire Memorandum, the Limited Partnership Agreement, and the Subscription Agreement carefully before making an investment decision.
A. The Offering
The Fund. Harrowgate Private Equity Fund V LP ("HPE Fund V" or the "Fund") is a Delaware limited partnership to be formed for the purpose of making control-oriented buyout investments in North American mid-market and upper-mid-market companies.
General Partner. The general partner of the Fund is Harrowgate Fund V GP LLC ("Fund V GP" or the "General Partner"), a Delaware limited liability company to be formed in connection with the Fund's organization. The sole member of the General Partner is Harrowgate Capital Partners LLC, a Delaware limited liability company and SEC-registered investment adviser (the "Sponsor" or "HCP").
Target Fund Size. The Fund is targeting aggregate capital commitments of $2,000,000,000 (two billion dollars), which represents the hard cap for the Fund as set forth in the Limited Partnership Agreement.
Minimum First Close. The General Partner intends to hold the First Close upon the receipt of aggregate capital commitments of at least $750,000,000 (seven hundred fifty million dollars).
Minimum LP Commitment. The minimum capital commitment by a single Limited Partner is $10,000,000 (ten million dollars), subject to waiver or reduction by the General Partner in its sole discretion.
Offering Exemption. The Interests are being offered and sold pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. The Fund will rely on the exclusion from registration as an investment company under Section 3(c)(7) of the Investment Company Act. All investors must be "qualified purchasers" as defined in Section 2(a)(51) of the Investment Company Act and "accredited investors" as defined in Rule 501(a) of Regulation D.
Governing Law. The Fund will be formed as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §§ 17-101 et seq., and the Limited Partnership Agreement will be governed by the laws of the State of Delaware.
B. The Sponsor
Harrowgate Capital Partners LLC ("HCP" or the "Sponsor") is a Delaware limited liability company founded in 2009 by Marcus J. Harrowgate. The Sponsor is headquartered at 1200 Concord Pike, Suite 600, Wilmington, Delaware 19803. HCP is registered with the U.S. Securities and Exchange Commission ("SEC") as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act") (SEC File No. 801-79223; CRD No. 298417).
Since its founding, HCP has managed four predecessor buyout funds (HPE Funds I–IV) with combined committed capital of approximately $3.76 billion. As of December 31, 2024, HCP manages approximately $5.8 billion in total assets under management across these four predecessor funds, inclusive of unrealized portfolio value. HCP's investment program has consistently focused on control-oriented buyout investments in North American mid-market and upper-mid-market companies across four core sectors: industrials, business services, healthcare services, and technology-enabled services.
The Sponsor's investment activities are led by an experienced and stable team of investment professionals, headed by Marcus J. Harrowgate (Founder, Managing Partner, and Chief Investment Officer) and Diana R. Castellano (Partner and Co-Head of Investments). The biographies of key investment professionals are set forth in Section IV of this Memorandum.
C. Investment Strategy Overview
The Fund will pursue a control-oriented buyout investment strategy focused on North American mid-market and upper-mid-market companies. The Fund will target investments across four primary sectors: (i) industrials, (ii) business services, (iii) healthcare services, and (iv) technology-enabled services. The Fund will seek to deploy equity checks of $75,000,000 to $250,000,000 per transaction, targeting companies with enterprise values of approximately $200 million to $1.5 billion.
The Fund's investment strategy emphasizes active ownership and hands-on value creation through strategic repositioning, operational improvement, margin expansion, bolt-on acquisitions, and management team enhancement. The Sponsor's approach is grounded in disciplined entry pricing, a focus on downside protection, and the identification of multiple paths to value realization. The investment strategy is described in further detail in Section VI of this Memorandum.
D. Fund Structure Summary
The Fund has been designed to accommodate a broad range of institutional investors through the following coordinated investment vehicles:
Main Fund. Harrowgate Private Equity Fund V LP, a Delaware limited partnership, will serve as the primary investment vehicle for U.S. taxable investors and certain institutional investors.
Parallel Fund. Harrowgate Fund V Parallel LP, a Delaware limited partnership, will invest alongside the Main Fund on a pro rata basis and is principally designed for certain tax-exempt and non-U.S. limited partners requiring structural separation from the Main Fund.
Offshore Feeder. Harrowgate Fund V Offshore SLP, a Cayman Islands exempted limited partnership, will accommodate non-U.S. investors preferring a Cayman Islands-domiciled vehicle.
blocker Entity. HGF V blocker Corp., a Delaware C corporation, will serve as a single-purpose entity for certain tax-exempt investors (such as endowments and foundations) seeking to mitigate exposure to unrelated business taxable income ("UBTI").
All vehicles will invest on a pro rata basis alongside the Main Fund on substantially identical economic terms, as described in greater detail in Section VIII of this Memorandum.
E. Key Terms Snapshot
The following table summarizes the key economic and structural terms of the Fund. This summary is qualified in its entirety by the detailed descriptions set forth in Section VII ("Summary of Principal Terms") of this Memorandum and by the terms of the Limited Partnership Agreement.
F. Key Dates
III. THE SPONSOR — HARROWGATE CAPITAL PARTNERS LLC
A. Firm Overview
Harrowgate Capital Partners LLC ("HCP" or the "Sponsor") is a Delaware limited liability company founded in 2009 by Marcus J. Harrowgate, a veteran private equity professional with nearly three decades of experience in mid-market buyout investing. The firm is headquartered at 1200 Concord Pike, Suite 600, Wilmington, Delaware 19803.
HCP is registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (SEC File No. 801-79223; CRD No. 298417). The firm's Form ADV Part 2A is available on the SEC's Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov) and is incorporated by reference into this Memorandum.
Since its founding, HCP has dedicated its investment activities exclusively to control-oriented buyout investments in North American mid-market and upper-mid-market companies, with a focus on four core sectors: industrials, business services, healthcare services, and technology-enabled services. This sector-focused approach has enabled the firm to develop deep domain expertise, extensive industry networks, and a repeatable value creation playbook across its target markets.
As of December 31, 2024, HCP manages approximately $5.8 billion in total assets under management across four predecessor buyout funds (HPE Funds I–IV), with combined committed capital of approximately $3.76 billion. The firm's investor base includes a diversified roster of leading institutional investors, including public and corporate pension funds, endowments, foundations, sovereign wealth funds, insurance companies, and family offices located in North America, Europe, Asia, and the Middle East.
HCP employs a team of experienced investment professionals who collectively possess decades of experience in private equity investing, corporate operations, and financial management. The investment team's composition, backgrounds, and responsibilities are described in detail in Section IV of this Memorandum.
B. Firm History and Evolution
HCP was established in 2009 following the departure of Marcus J. Harrowgate from Alderton Partners, a mid-market private equity firm, where he served as Managing Director. Mr. Harrowgate founded HCP with the vision of creating a specialist mid-market buyout firm that combines rigorous investment discipline with hands-on, operationally oriented value creation.
The firm has grown steadily since its founding, both in terms of assets under management and organizational capabilities, reflecting strong investor demand and an expanding opportunity set within the firm's target markets:
• 2009: Harrowgate Capital Partners LLC founded by Marcus J. Harrowgate in Wilmington, Delaware. Initial team recruited from leading private equity firms and operating companies.
• 2012: HPE Fund I raised with $480,000,000 in committed capital from a focused group of institutional investors. Fund I made eight platform investments across industrials and business services, and has been fully realized as of the date of this Memorandum.
• 2015: HPE Fund II raised with $780,000,000 in committed capital, reflecting a 63% increase over Fund I. Fund II broadened the firm's sector focus to include healthcare services. Fund II is substantially realized as of the date of this Memorandum.
• 2018: HPE Fund III raised with $1,050,000,000 in committed capital, surpassing the $1 billion threshold for the first time. Fund III further expanded into technology-enabled services and introduced dedicated operational resources to support portfolio companies. Fund III is currently in its harvesting phase.
• 2021: HPE Fund IV raised with $1,450,000,000 in committed capital, representing a 38% increase over Fund III and cementing HCP's position as a leading upper-mid-market buyout sponsor. Fund IV is currently in its harvesting phase, with approximately 82% of committed capital deployed as of December 31, 2024.
Throughout this period of growth, HCP has maintained a disciplined and focused investment approach, resisting the temptation to expand beyond its areas of core competency. The firm's consistent top-quartile performance across multiple fund vintages has enabled it to attract and retain a high-quality institutional investor base.
C. Investment Philosophy
HCP's investment philosophy is built on several core tenets that have guided the firm since its inception:
Control-Oriented Investing. HCP seeks to acquire majority equity positions in its portfolio companies, enabling the firm to exercise meaningful influence over strategic direction, management selection, capital allocation, and operational priorities. In selective situations, the firm may invest in significant minority positions provided it obtains robust governance rights, including board representation and protective provisions.
Defensible Businesses with Recurring Revenues. HCP targets companies with defensible market positions, sustainable competitive advantages, and a high degree of recurring or contractual revenue. The firm believes that businesses with these characteristics generate more predictable cash flows, offer greater downside protection, and provide a stable foundation for growth initiatives.
Active Value Creation. HCP's approach to value creation is hands-on and operationally oriented. The firm deploys dedicated operating resources post-acquisition to drive strategic repositioning, operational improvement, margin expansion, go-to-market optimization, digital transformation, and management team enhancement. The firm's value creation playbook has been refined and institutionalized over four fund cycles and is tailored to each portfolio company's specific circumstances.
Disciplined Entry Pricing. HCP places significant emphasis on entry valuation discipline, seeking to acquire businesses at attractive prices relative to their normalized cash flow generation. The firm's underwriting process is grounded in conservative assumptions and stress-tested to account for adverse economic scenarios.
Multiple Paths to Value Creation. HCP seeks to identify and underwrite multiple levers for value creation in each investment, reducing dependence on any single driver and increasing the resilience of the investment thesis. These levers typically include organic revenue growth, margin expansion, bolt-on acquisitions, working capital optimization, and strategic repositioning.
Equity Check Range. The Fund will target equity checks of $75,000,000 to $250,000,000 per investment, with target enterprise values typically ranging from approximately $200 million to $1.5 billion. This investment size range positions HCP in the upper segment of the mid-market, where the firm believes there is less competition from both large-cap sponsors and smaller firms, and where the firm's operationally focused approach delivers the greatest differentiation.
D. Sector Expertise
HCP has developed deep domain expertise across four primary sectors through its investment activities over more than fifteen years and across four fund vintages. The firm's sector expertise is reflected in its network of industry relationships, its ability to source proprietary and differentiated investment opportunities, and its track record of successful value creation within each sector.
Industrials. HCP's industrials practice focuses on specialty manufacturing, distribution, environmental services, and industrial technology. The firm targets businesses that serve essential end markets, possess proprietary processes or intellectual property, and benefit from long-standing customer relationships. HCP's operating playbook in the industrials sector emphasizes lean manufacturing principles, supply chain optimization, strategic pricing, and selective bolt-on acquisitions to consolidate fragmented markets.
Business Services. HCP's business services practice encompasses outsourced services, professional services, testing and inspection, and facilities management. The firm seeks businesses with recurring or contractual revenue streams, high customer retention rates, and opportunities to expand service offerings or geographic reach. Value creation in this sector typically involves go-to-market optimization, cross-selling, operating model transformation, and technology-enabled service delivery.
Healthcare Services. HCP's healthcare services practice targets multi-site healthcare providers, healthcare IT and technology-enabled services, and specialty pharmaceutical services. The firm focuses on businesses that benefit from favorable demographic and regulatory tailwinds, possess scalable operating models, and have identifiable pathways for growth through de novo expansion or strategic acquisitions. The firm's approach to healthcare investing emphasizes clinical quality, regulatory compliance, payor diversification, and technology adoption.
Technology-Enabled Services. HCP's technology-enabled services practice covers enterprise software and SaaS, data analytics, IT services, and fintech infrastructure. The firm targets businesses with high recurring revenue, strong net retention rates, and the ability to achieve operating leverage at scale. Value creation in this sector focuses on product roadmap acceleration, customer acquisition optimization, pricing strategy, and strategic M&A to expand capabilities or enter adjacent markets.
E. Value Creation Approach
Central to HCP's investment model is a systematic and repeatable approach to post-acquisition value creation. The Sponsor's value creation framework encompasses the following key elements:
Dedicated Operating Resources. HCP deploys a team of dedicated operating professionals who work alongside portfolio company management teams to develop and execute tailored value creation plans. These operating professionals bring deep functional expertise in areas such as finance, operations, commercial strategy, human capital management, information technology, and procurement.
Strategic Playbook. The firm's value creation playbook includes a suite of initiatives organized around four primary themes: (i) margin improvement through cost optimization, procurement, and operational efficiency; (ii) go-to-market optimization through sales force effectiveness, pricing strategy, and customer segmentation; (iii) digital transformation through technology adoption, data analytics, and process automation; and (iv) M&A integration through disciplined bolt-on acquisition strategies and post-merger integration best practices.
Portfolio Monitoring and Reporting. HCP maintains a rigorous portfolio monitoring framework that includes monthly financial and operational reporting, quarterly business reviews, and annual strategic planning sessions for each portfolio company. Key performance indicators are tracked and benchmarked against both the company's budget and industry comparables.
Board Governance. HCP takes an active role in the governance of its portfolio companies, typically designating multiple representatives to the board of directors and working closely with management on strategic priorities, capital allocation, talent management, and risk mitigation.
ESG Integration. HCP integrates environmental, social, and governance ("ESG") considerations into its investment process and portfolio company operations. The firm's ESG framework includes pre-acquisition ESG due diligence, post-acquisition ESG action plans, and ongoing monitoring and reporting of material ESG metrics. HCP believes that effective management of ESG risks and opportunities contributes to long-term value creation and risk mitigation.
IV. KEY INVESTMENT PROFESSIONALS
The following sections describe the backgrounds and responsibilities of the senior investment professionals and other key personnel who will be involved in the management and operations of the Fund. The Sponsor believes that the depth and stability of its investment team, and the team's collective experience across multiple market cycles, are among its key competitive advantages.
A. Senior Investment Team
Marcus J. Harrowgate — Founder, Managing Partner & Chief Investment Officer
Marcus J. Harrowgate founded Harrowgate Capital Partners LLC in 2009 and has served as its Managing Partner and Chief Investment Officer since inception. Mr. Harrowgate brings twenty-eight years of private equity experience to the firm, with a career that has spanned multiple economic and market cycles.
Prior to founding HCP, Mr. Harrowgate served as Managing Director at Alderton Partners, a mid-market private equity firm based in Philadelphia, where he was responsible for originating, executing, and managing buyout investments across the industrials and business services sectors. During his tenure at Alderton Partners, Mr. Harrowgate led or co-led numerous successful transactions and developed the expertise and relationships that form the foundation of HCP's current investment platform.
Mr. Harrowgate is responsible for the overall investment strategy, portfolio management, and strategic leadership of the firm. He chairs the Investment Committee and is actively involved in the origination, evaluation, and execution of all investment opportunities. He also plays a leading role in the firm's investor relations activities and serves on the boards of directors of several portfolio companies.
Mr. Harrowgate is designated as a Key Person under the Limited Partnership Agreement. A Key Person Event would be triggered if Mr. Harrowgate ceases to devote substantially all of his professional time to the Fund's investment activities, as described in Section VII.P of this Memorandum.
Mr. Harrowgate is age 56.
Diana R. Castellano — Partner, Co-Head of Investments
Diana R. Castellano is a Partner and Co-Head of Investments at Harrowgate Capital Partners LLC. Ms. Castellano joined HCP in 2012 and has been instrumental in the firm's growth and in the expansion of its investment activities into the healthcare services and technology-enabled services sectors.
Ms. Castellano brings nineteen years of private equity experience to the firm. Prior to joining HCP, she served at Whitfield Capital Advisors, where she was responsible for mid-market buyout investments across multiple industries. Ms. Castellano has extensive experience in all phases of the investment cycle, including deal origination, due diligence, structuring, negotiation, and post-acquisition value creation.
At HCP, Ms. Castellano co-leads the firm's investment sourcing, execution, and portfolio management activities alongside Mr. Harrowgate. She is a member of the Investment Committee and serves on the boards of directors of several portfolio companies.
Ms. Castellano is designated as a Key Person under the Limited Partnership Agreement. A Key Person Event would be triggered if Ms. Castellano ceases to devote substantially all of her professional time to the Fund's investment activities, as described in Section VII.P of this Memorandum.
Ms. Castellano is age 47.
Jonathan P. Birch — Partner, Head of Operations & Chief Financial Officer
Jonathan P. Birch is a Partner, Head of Operations, and Chief Financial Officer at Harrowgate Capital Partners LLC. Mr. Birch is a Certified Public Accountant (CPA) with extensive background in fund operations, financial management, and institutional reporting.
Prior to joining HCP, Mr. Birch served as Chief Financial Officer at Ashgrove Holdings, a diversified investment management firm, where he was responsible for financial reporting, fund accounting, regulatory compliance, and operational infrastructure. Mr. Birch's experience encompasses fund formation, audit management, tax reporting, and investor relations.
At HCP, Mr. Birch is responsible for the oversight of fund administration, financial reporting, regulatory compliance, and operational management across the Harrowgate platform. He works closely with the Fund's administrator, auditor, custodian, and other service providers to ensure the integrity and timeliness of all financial and operational reporting.
Mr. Birch is one of the three principals who provides a personal clawback guarantee in connection with the Fund's carried interest arrangements, as described in Section VII.L of this Memorandum.
Mr. Birch is age 51.
B. Other Key Professionals
Rachel M. Overton — Partner, Head of Investor Relations
Rachel M. Overton is a Partner and Head of Investor Relations at Harrowgate Capital Partners LLC. Ms. Overton is responsible for all aspects of the firm's limited partner relations, fundraising activities, and investor communications. She is the primary point of contact for existing and prospective investors and is responsible for developing and maintaining relationships with a broad range of institutional investors globally.
Prior to joining HCP, Ms. Overton served at Grantley Institutional Partners, a leading placement agent, where she advised private equity firms on fundraising strategy and institutional investor engagement. Ms. Overton brings deep knowledge of institutional investor requirements, reporting expectations, and governance practices.
Ms. Overton is age 44.
Naveen S. Krishnamurthy — Principal
Naveen S. Krishnamurthy is a Principal at Harrowgate Capital Partners LLC. Mr. Krishnamurthy is responsible for technology-sector investment origination, due diligence, and transaction execution. He works closely with Ms. Castellano and Mr. Harrowgate on the firm's technology-enabled services investment activities and has developed extensive relationships with industry executives, advisors, and intermediaries in the technology sector.
Mr. Krishnamurthy has led or supported the execution of several of the firm's most successful technology-sector investments and plays an active role in post-acquisition value creation, including serving on the boards of directors of portfolio companies in the technology sector.
Mr. Krishnamurthy is age 38.
Catherine E. Loomis — General Counsel & Chief Compliance Officer
Catherine E. Loomis serves as General Counsel and Chief Compliance Officer of Harrowgate Capital Partners LLC. Ms. Loomis is responsible for all legal, regulatory, and compliance functions across the Harrowgate platform, including fund formation, regulatory filings, compliance program management, employment matters, and litigation oversight.
Ms. Loomis manages the firm's compliance program under the Investment Advisers Act of 1940 and is the firm's designated Chief Compliance Officer. She works closely with Fund Counsel and external regulatory advisors on all matters relating to the formation and operation of the Fund and its parallel vehicles.
Ms. Loomis is age 43.
C. Key Person Provisions
Marcus J. Harrowgate and Diana R. Castellano are designated as Key Persons under the Limited Partnership Agreement. The Key Person provisions are designed to ensure that the investment professionals most critical to the Fund's success remain actively engaged in the Fund's investment activities throughout the Investment Period.
A "Key Person Event" is triggered if either Mr. Harrowgate or Ms. Castellano ceases to devote substantially all of his or her professional time and attention to the Fund's investment activities, whether due to death, disability, departure from the firm, or any other cause.
Upon the occurrence of a Key Person Event, the Investment Period shall automatically be suspended. During such suspension, the General Partner shall not make any new investments on behalf of the Fund (other than previously committed follow-on investments and investments for which binding commitments have been made prior to the date of suspension). The suspension shall continue until the earlier of: (i) the cure of the Key Person Event (including through the designation of a replacement Key Person approved by the Limited Partner Advisory Committee), or (ii) the waiver of the Key Person Event by a majority-in-interest of the Limited Partners.
If a Key Person Event is not cured or waived within twelve months of its occurrence, the Investment Period shall terminate. For additional detail regarding the Key Person provisions, see Section VII.P ("Key Person") of this Memorandum and the corresponding provisions of the Limited Partnership Agreement.
V. PREDECESSOR FUND TRACK RECORD
A. Overview of Predecessor Funds
Since its founding in 2009, Harrowgate Capital Partners LLC has raised and managed four predecessor buyout funds (HPE Funds I–IV), with combined committed capital of approximately $3.76 billion. The Sponsor's predecessor fund program has generated consistent and attractive returns across multiple fund vintages, reflecting the firm's disciplined investment approach, active value creation capabilities, and sector expertise.
As of December 31, 2024, the Sponsor manages approximately $5.8 billion in total assets under management across the predecessor funds, inclusive of the estimated fair market value of unrealized portfolio holdings. The fund-level performance data presented below reflects the actual results achieved by the predecessor funds and is intended to provide prospective investors with context regarding the Sponsor's historical investment track record. Prospective investors should, however, carefully review the performance disclaimers and limitations set forth below before drawing conclusions from the historical data.
B. Performance Summary (as of December 31, 2024)
The following table presents summary performance data for the Sponsor's four predecessor buyout funds, in each case as of December 31, 2024:
The predecessor fund track record reflects a consistent pattern of attractive risk-adjusted returns across a range of economic and market environments. HPE Fund I, the firm's inaugural fund, has been fully realized and generated a net internal rate of return of 21.3% and a total value to paid-in multiple of 2.1x, returning substantially all invested capital to limited partners. HPE Fund II is substantially realized, with remaining unrealized holdings expected to be exited over the next twelve to twenty-four months. HPE Fund III is in its harvesting phase, with a strong portfolio of both realized and unrealized investments. HPE Fund IV, the most recent predecessor fund, is also in its harvesting phase, with approximately 82% of committed capital deployed as of December 31, 2024; given the relatively early stage of Fund IV's realization cycle, its performance data should be evaluated with appropriate caution.
C. Performance Disclaimers
Past performance is not indicative of future results. There can be no assurance that the Fund will achieve investment results comparable to those of any predecessor fund. The investment environment, competitive landscape, regulatory framework, and economic conditions that prevailed during the investment periods of the predecessor funds may differ materially from those that will prevail during the Fund's investment period.
Net returns. All performance data presented in this section is net of management fees, carried interest, organizational expenses, and other fund-level expenses. Returns are presented from the perspective of a limited partner investing at the initial closing of each predecessor fund.
IRR and multiples methodology. Internal rates of return ("IRR") are computed on a since-inception basis using actual cash flow dates and amounts. Total value to paid-in ("TVPI") multiples represent the sum of distributions and residual value divided by contributed capital. Distributions to paid-in ("DPI") multiples represent cumulative distributions divided by contributed capital.
Unrealized values. The performance data for HPE Fund II, HPE Fund III, and HPE Fund IV includes the estimated fair market value of unrealized portfolio holdings as of December 31, 2024. Unrealized values are based on valuation estimates prepared by the General Partner in accordance with the applicable fund's valuation policy and the principles of ASC 820 (Fair Value Measurement). Such estimates involve significant judgment and are inherently subject to uncertainty. Actual realized values may differ materially from estimated fair market values. Prospective investors should be aware that interim valuations of unrealized investments may change significantly between reporting dates and may not reflect the price at which such investments are ultimately realized.
Fund IV. HPE Fund IV is in a relatively early stage of its investment cycle and realization program. Only approximately 30% of its invested capital has been realized, and a substantial portion of its reported TVPI is attributable to unrealized holdings. Accordingly, Fund IV's performance data should be evaluated with particular caution and is subject to a higher degree of variability than the performance data of the more mature predecessor funds.
Detailed data available. Detailed performance data for the predecessor funds, including deal-level attribution, sector-level analysis, gross and net performance, and related information, is available upon request, subject to the execution of an appropriate confidentiality agreement.
D. Representative Investments
The Sponsor intends to provide prospective investors with summary descriptions of selected representative investments from HPE Funds I–IV as part of the fundraising materials for the Fund. These descriptions will include, for each representative investment, the relevant sector, investment thesis, key value creation initiatives, realized or unrealized outcomes, and applicable performance metrics.
Representative investment descriptions are provided for illustrative purposes only. The Fund will pursue its own independent investment strategy, and there can be no assurance that the Fund will invest in the same sectors, geographies, or types of businesses as the predecessor funds. The investment opportunities available to the Fund will depend on market conditions, competitive dynamics, and other factors that may differ materially from those that prevailed during the investment periods of the predecessor funds.
Prospective investors may request additional information regarding the Sponsor's representative investments and track record by contacting the Investor Relations team (see Section XX.B of this Memorandum).
VI. INVESTMENT STRATEGY AND OBJECTIVE
A. Investment Objective
The Fund's primary investment objective is to generate superior risk-adjusted returns for its investors through control-oriented buyout investments in North American mid-market and upper-mid-market companies. The Fund will seek to achieve this objective by acquiring businesses with defensible competitive positions, recurring revenue characteristics, and identifiable operational improvement opportunities, and by implementing active value creation strategies to drive growth, improve profitability, and enhance the strategic positioning of its portfolio companies.
The Fund will target attractive net returns consistent with the performance of the Sponsor's predecessor funds, though there can be no assurance that any particular level of return will be achieved. The Fund's investment objective is long-term in nature, and investors should expect that the realization of returns from the Fund's investments will occur over the full term of the Fund.
B. Geographic Focus
The Fund's investment activities will be focused primarily on North America, encompassing the United States and Canada. The Sponsor believes that the North American mid-market continues to offer a rich and diverse opportunity set for buyout investing, driven by the depth and breadth of the economy, the availability of acquisition financing, the presence of a large population of founder-owned and family-owned businesses, and the ongoing trend toward professionalization and institutionalization of mid-market companies.
The Fund may selectively consider cross-border investment opportunities where the target company's North American operations constitute the majority of its revenues and operating assets. In such cases, the Sponsor will evaluate and manage cross-border risks, including currency risk, foreign regulatory requirements, and political risk, as part of its investment due diligence and portfolio management processes.
C. Target Sectors
The Fund will focus its investment activities on four primary sectors in which the Sponsor has developed deep domain expertise and extensive industry networks over the course of its predecessor funds:
Industrials. The Fund will target investments in specialty manufacturing, distribution, environmental services, and industrial technology businesses. The Sponsor believes that the industrials sector offers attractive opportunities for value creation through operational improvement, lean manufacturing, supply chain optimization, and strategic acquisitions.
Business Services. The Fund will seek investments in outsourced services, professional services, testing and inspection, and facilities management companies. The Sponsor targets business services companies with recurring or contractual revenue streams, high customer retention, and the ability to achieve operating leverage through scale and technology adoption.
Healthcare Services. The Fund will pursue investments in multi-site healthcare providers, healthcare IT and technology-enabled services, and specialty pharmaceutical services businesses. The Sponsor believes that the healthcare services sector benefits from favorable long-term demographic and regulatory trends, and that well-managed healthcare services businesses can deliver attractive growth with defensible market positions.
Technology-Enabled Services. The Fund will target investments in enterprise software and SaaS, data analytics, IT services, and fintech infrastructure companies. The Sponsor seeks technology-enabled services businesses with high recurring revenue, strong net retention rates, and the ability to scale efficiently.
The Fund may opportunistically consider investments in adjacent sectors where the investment team has developed relevant expertise and where the investment opportunity meets the Fund's return and risk criteria. However, the Fund does not intend to pursue a generalist investment strategy and will remain focused on its four core sectors.
D. Investment Parameters
The Fund will operate within the following investment parameters:
Equity Investment Size. The Fund will target equity investments of $75,000,000 to $250,000,000 per transaction. This equity check range positions the Fund in the upper segment of the mid-market, which the Sponsor believes is characterized by less competition, greater opportunities for operational value creation, and more attractive entry valuations than the large-cap buyout market.
Target Enterprise Values. The Fund will target companies with enterprise values of approximately $200 million to $1.5 billion. This enterprise value range encompasses a broad universe of potential acquisition targets and allows for the use of moderate portfolio company leverage in combination with the Fund's equity contributions.
Control Investments. The Fund will primarily pursue control investments, defined as acquisitions in which the Fund obtains a majority equity position or, in certain cases, a significant minority position with strong contractual governance rights, including board representation, veto rights over material decisions, and other protective provisions. Control ownership enables the Sponsor to drive its value creation agenda and to manage downside risk effectively.
Concentration Limit. No single portfolio investment may exceed 20% of the Fund's aggregate commitments at the time of commitment. At the Fund's hard cap of $2,000,000,000, this limit corresponds to a maximum equity investment of $400,000,000 in any single portfolio company.
E. Investment Criteria
The Fund will evaluate prospective investment opportunities against a set of core investment criteria, including:
• Defensible competitive position: Businesses with strong market positions, barriers to entry (including regulatory, scale, network effects, or proprietary technology), and sustainable competitive advantages.
• Recurring or contractual revenue: Businesses with a high proportion of recurring, subscription-based, contractual, or otherwise predictable revenue streams, which provide greater visibility into future cash flows and reduce volatility.
• Strong management teams: Businesses with proven and motivated management teams, or businesses where the Sponsor has identified actionable management upgrade opportunities to strengthen leadership.
• Identifiable value creation plan: Businesses for which the Sponsor can articulate and execute a clear, detailed, and actionable plan for value creation, with multiple independent levers.
• Multiple exit paths: Businesses that are attractive to a range of potential acquirers, including strategic buyers, financial sponsors, and public market investors, thereby reducing dependence on any single exit route.
• Attractive entry valuation: Businesses that can be acquired at valuations that are attractive relative to their normalized cash flow generation, providing a margin of safety and enhanced downside protection.
F. Sourcing and Deal Pipeline
The Sponsor utilizes a diversified approach to investment sourcing that combines proprietary origination efforts with intermediated transaction processes:
Proprietary sourcing. The Sponsor maintains direct relationships with company founders, management teams, operating executives, industry consultants, and other intermediaries that generate proprietary deal flow outside of traditional auction processes. The firm's sector specialization and long track record have established it as a credible and preferred buyer among business owners and management teams seeking a value-added partner.
Intermediated sourcing. The Sponsor maintains active relationships with a broad network of investment banks, advisory firms, and other intermediaries that present marketed deal opportunities. The firm's reputation for speed, certainty of execution, and fair dealing has enabled it to compete effectively in intermediated processes.
Deal pipeline. The Sponsor's established sector focus and extensive network of industry relationships provide a robust and diversified deal pipeline. The firm evaluates several hundred potential investment opportunities per year and maintains rigorous screening and prioritization disciplines to focus its resources on the most attractive opportunities. Across its predecessor fund program, the Sponsor has developed a deep understanding of the competitive dynamics, valuation trends, and risk profiles within each of its target sectors.
G. Portfolio Construction
The Fund will seek to construct a diversified portfolio of approximately ten to fifteen investments over the course of its Investment Period. The Fund's portfolio construction approach is guided by the following principles:
Diversification. The Fund will seek to achieve diversification across sectors, sub-sectors, end-market exposures, and geographies within North America. The Sponsor believes that a diversified portfolio reduces concentration risk and improves the risk-adjusted return profile of the Fund.
Concentration limit. As described above, no single investment may exceed 20% of aggregate commitments at the time of commitment, providing a structural limit on concentration.
Pacing. The Sponsor intends to deploy the Fund's committed capital over the five-year Investment Period in a disciplined and measured manner, avoiding the temptation to accelerate deployment in the early years of the Fund at the expense of investment discipline.
Follow-on investment capacity. The Fund will retain capacity for follow-on investments in existing portfolio companies, including bolt-on acquisitions and additional equity contributions, which the Sponsor believes are an important component of its value creation strategy.
VII. SUMMARY OF PRINCIPAL TERMS
The following summary describes the principal terms and conditions of the Fund. This summary is qualified in its entirety by reference to the Limited Partnership Agreement, which will govern the rights and obligations of the Limited Partners and the General Partner. In the event of any conflict or inconsistency between this summary and the Limited Partnership Agreement, the Limited Partnership Agreement shall control. Capitalized terms not defined in this summary have the meanings set forth in the Limited Partnership Agreement.