Key Takeaways
- • Peterson Partners closed a $510 million single-asset continuation vehicle for Kelso Industries, a mechanical, electrical, and plumbing (MEP) services platform founded in 2021 that operates across more than 40 U.S. states with over 4,000 employees.
- • NorthSands Capital served as sole lead investor with a commitment exceeding $450 million; Peterson Partners Fund X rolled its existing position and made an additional investment, while existing backer Paceline Equity Partners exited the deal.
- • Kelso serves mission-critical infrastructure end markets including data centers, healthcare, airports, industrial facilities, and advanced manufacturing, with capital proceeds directed toward acquisitions, geographic expansion, and capability enhancement.
- • NorthSands Capital, founded in 2023 by former Blackstone senior managing director Bruce McEvoy, led this continuation vehicle—a strategy focused on extending duration and acquiring growth capital for mature portfolio companies rather than launching traditional flagship funds.
- • Legal advisors included Jefferies (Peterson), Mayer Brown and Honigman (Peterson and Kelso), and Kirkland & Ellis (NorthSands), reflecting the institutional scale and complexity of the GP-led continuation transaction.
Summary
Peterson Partners announced on September 9 the successful close of a $510 million capital raise for Peterson Kelso Coinvest, LP, a continuation vehicle structured to extend the holding period and fund growth initiatives for Kelso Industries, a portfolio company initially backed by Peterson Partners Funds VIII and X. This GP-led continuation vehicle represents a strategic alternative to traditional flagship fundraising, allowing the firm to recycle capital and provide liquidity while maintaining operational control and upside participation in a mature asset.
Kelso Industries, founded in 2021 through a partnership between Peterson Partners and co-founders Steve Carroll and Steve Nicholson, has scaled rapidly to employ more than 4,000 personnel operating from a Draper, Utah headquarters. The platform specializes in integrated mechanical, electrical, and plumbing services serving resilient end markets across data centers, healthcare facilities, airports, industrial operations, and advanced manufacturing sectors—verticals characterized by consistent capital expenditure and high barriers to entry. This market positioning has attracted institutional capital seeking exposure to essential building-systems infrastructure.
NorthSands Capital anchored the continuation raise with a commitment exceeding $450 million, representing over 88% of the total vehicle size. NorthSands, established in 2023 by Bruce McEvoy, a former Blackstone senior managing director, specializes exclusively in single-asset continuation vehicles and has emerged as a dedicated capital source for GP-led extension financings. Peterson Partners Fund X rolled its existing position into the new vehicle and committed additional capital, ensuring alignment with the growth strategy. Paceline Equity Partners, an earlier backer from 2023, exited the transaction as part of the recapitalization.
Capital proceeds are earmarked for three strategic initiatives: acquisitions to consolidate fragmented MEP markets, capability enhancements including operational technology and workforce development, and geographic expansion into underserved regions. The transaction was supported by leading financial and legal advisors: Jefferies provided M&A counsel to Peterson Partners, while Mayer Brown and Honigman advised both Peterson and Kelso; Kirkland & Ellis represented NorthSands Capital. This advisor lineup underscores the institutional-grade execution and complexity typical of mid-market infrastructure continuation vehicles.
Kelso Industries, founded in 2021 through a partnership between Peterson Partners and co-founders Steve Carroll and Steve Nicholson, has scaled rapidly to employ more than 4,000 personnel operating from a Draper, Utah headquarters. The platform specializes in integrated mechanical, electrical, and plumbing services serving resilient end markets across data centers, healthcare facilities, airports, industrial operations, and advanced manufacturing sectors—verticals characterized by consistent capital expenditure and high barriers to entry. This market positioning has attracted institutional capital seeking exposure to essential building-systems infrastructure.
NorthSands Capital anchored the continuation raise with a commitment exceeding $450 million, representing over 88% of the total vehicle size. NorthSands, established in 2023 by Bruce McEvoy, a former Blackstone senior managing director, specializes exclusively in single-asset continuation vehicles and has emerged as a dedicated capital source for GP-led extension financings. Peterson Partners Fund X rolled its existing position into the new vehicle and committed additional capital, ensuring alignment with the growth strategy. Paceline Equity Partners, an earlier backer from 2023, exited the transaction as part of the recapitalization.
Capital proceeds are earmarked for three strategic initiatives: acquisitions to consolidate fragmented MEP markets, capability enhancements including operational technology and workforce development, and geographic expansion into underserved regions. The transaction was supported by leading financial and legal advisors: Jefferies provided M&A counsel to Peterson Partners, while Mayer Brown and Honigman advised both Peterson and Kelso; Kirkland & Ellis represented NorthSands Capital. This advisor lineup underscores the institutional-grade execution and complexity typical of mid-market infrastructure continuation vehicles.
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