Huntsman Gay

Steve Young's private equity firm is raising $1 billion

March 4, 2014: 11:38 AM ET

HGGC is in market with its second fund.

140304113027-steve-young-620xaFORTUNE -- HGGC, the mid-market private equity firm whose partners include former NFL quarterback Steve Young, is in the midst of raising $1 billion for its second fund.

The Palo Alto, Calif.-based firm disclosed its intentions in a recent SEC filing, and a source familiar with the situation says that a first close is just weeks away.

HGGC (f.k.a. Huntsman Gay Global Capital) opened its data room back in December, with plans to market throughout 2014. But the process has been accelerated a bit, after entering into negotiations for one or two new "platform-type" acquisitions.If those transactions occur, HGGC would need to draw capital from the new fund (its $1.1 billion debut fund still has some dry powder, but mostly just for add-ons to existing portfolio companies).

Evercore Partners is serving as placement agent.

HGGC's first fund featured a 20.2% internal rate of return through the end of Q1 2013, according to data published by the California Public Employees' Retirement System. Existing portfolio companies include MyWebGrocer and Citadel Plastic Holdings. Upon selling Hybris Software to SAP (SAP) last summer, the firm had returned all of its called capital.

Three of HGGC's five founders -- Young, CEO Rich Lawson and Greg Benson -- are participating on the second fund. Jon Huntsman Sr. has retired, while Bob Gay left in 2012 to work full-time with The Church of Jesus Christ of Latter-day Saints.

Lawson declined to comment on the fundraising, citing SEC marketing restrictions.

Sign up for Dan Primack's daily email newsletter on deals and deal-makers: GetTermSheet.com

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