Sterling Investment Partners Closes $1.6B Fund, Signals Middle-Market Resilience

NEW YORK, NY – November 20, 2025

Sterling Investment Partners, a middle-market private equity firm, announced today the final closing of its fifth institutional fund, Sterling Investment Partners V, L.P., with $1.6 billion in commitments, exceeding its $1.25 billion target. The oversubscribed fund signals continued investor appetite for private equity, particularly in the middle market, and highlights a strategic shift toward continuation vehicles for maximizing asset value.

Navigating a Complex Fundraising Environment

Despite a generally slower pace of fundraising across the private equity landscape, Sterling’s success underscores the firm’s established track record and ability to identify promising opportunities in the business services and distribution sectors. Industry observers note that while capital is becoming more selective, proven managers with demonstrated performance continue to attract significant investment.

“The fundraising environment is definitely more challenging than it was a few years ago,” says one limited partner who participated in the fund. “LPs are doing more due diligence and focusing on managers with consistent returns and a clear investment strategy. Sterling’s performance speaks for itself.”

The firm’s ability to exceed its target, in an environment where many funds are struggling to reach their goals, demonstrates investor confidence in Sterling's approach and long-term vision. While larger funds often garner headlines, the middle market continues to offer attractive opportunities for growth and value creation, particularly for firms with specialized expertise and operational capabilities.

The Rise of Continuation Vehicles: A New Approach to Portfolio Management

A key component of Sterling's recent strategy is the increased utilization of continuation vehicles (CVs). The firm’s first investment from Fund V involved a continuation vehicle recapitalization of XKIG, a former portfolio company. This allows Sterling to retain ownership of a high-performing asset, offering existing investors an opportunity to remain invested and providing a liquidity option for those looking to exit.

“Continuation vehicles are becoming increasingly popular,” explains a private equity analyst. “They allow GPs to capture continued value from successful investments and offer LPs flexibility in managing their portfolios. It’s a win-win situation, provided the asset continues to perform well.”

The use of CVs reflects a broader trend in the private equity industry, where GPs are seeking innovative ways to maximize returns and extend the life of successful investments. This approach can be particularly beneficial in a challenging M&A environment, where exit opportunities may be limited. By retaining ownership of strong assets, GPs can continue to drive growth and value creation over the long term.

A Founder-Friendly Approach to Value Creation

Sterling Investment Partners has also earned recognition for its founder-friendly investment approach. The firm was recently named to Inc. Magazine’s Founder-Friendly Investors list, highlighting its commitment to building strong relationships with entrepreneurs and supporting their long-term vision.

“A strong cultural fit is essential,” says one CEO of a Sterling portfolio company. “They’re not just looking at financial metrics; they’re genuinely interested in understanding our business and working with us to achieve our goals.”

This collaborative approach, combined with Sterling’s operational expertise, has been instrumental in driving value creation across its portfolio companies. By empowering entrepreneurs and fostering a culture of collaboration, Sterling has been able to unlock significant growth potential and deliver strong returns for its investors. The focus is on long-term partnerships, providing operational support, and enabling management teams to execute their strategic vision. This approach is particularly attractive to founders who are seeking a financial partner who understands their business and shares their commitment to sustainable growth.

Sterling’s strategic focus on middle-market businesses also sets it apart. The firm targets companies with established market positions, recurring revenue streams, and opportunities for operational improvement. This approach allows Sterling to create value through both organic growth initiatives and strategic acquisitions. The firm's experience in the business services and distribution sectors provides it with a deep understanding of the dynamics of these markets, enabling it to identify and execute compelling investment opportunities.

Fund V’s success is a testament to Sterling’s commitment to a disciplined investment approach, a collaborative partnership with entrepreneurs, and a long-term perspective on value creation.