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December 18, 2023
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Argonaut Collects $500M in Backing for Industrial Giants: WSJ Exclusive

  • Argonaut Private Equity managed to attract $500 million for its latest fund to back smaller industrial businesses.
  • The Tulsa, Oklahoma-based buyout firm initially targeted $400 million, exceeding this amount due to investors reacting to raised interest rates and shifting from technology-based investments.

Argonaut Private Equity was originally founded as an investment vehicle for billionaire oilman George Kaiser. It has since grown to serve a variety of primarily small to mid-sized industrial companies, focusing on those in parts of the U.S. that have been traditionally underserviced.

With its fifth private equity fund, Argonaut Private Equity Fund V, the firm aimed to raise $400 million. However, a response to increasing interest rates has seen investors pivot from technology investments. Benefiting from this shift, Argonaut was successful in exceeding its target, raising its upper fundraising limit of $500 million.

This success highlights an ongoing trend within the investment industry: as interest rates rise, investors are increasingly moving their funds away from technology towards other areas. Industrial sectors, which are perceived to be a more stable investment as interest rates increase, are attracting more funds. Argonaut’s success in its latest fund is a clear sign of this shift.

Understanding this trend will likely be crucial for investors, particularly where future interest rate rises are predicted. The move away from investment in tech may also present opportunities for industrial companies, particularly smaller, more regional businesses in traditionally underserviced areas, who may have previously had difficulty attracting capital.

Argonaut’s exceeded fundraising target and the successful backing it received demonstrates the potential for growth and investment in the industrial sector. It will be interesting to see how this shift continues to drive investments in this area and support underserved smaller businesses going forward.

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