service firms, Welsh, Carson, Anderson & Stowe earlier this month raised $1.425 billion in a limited investment partnership. The money will be to invest in buyouts, restructurings or changes of control of companies in the information services and health care industries, Welsh Carson officials said. The new partnership, Welsh, Carson Anderson & Stowe VII, is the ninth institutionally funded partnership formed by the firm since 1978. Welsh Carson officials said much of the new money generated from the limited partnership will be used to continue to expand the firm's already extensive holdings in technology firms that serve the financial industry. This computer industry subsector has seen better than average returns on investment over the past few years, as banks and Wall Street have muscled up with the latest technology in order to remain competitive. Since the early 1980s, Welsh Carson has provided capital in such bank systems stalwarts as the Bisys Group Inc., Broadway & Seymour Inc., Comdata Holdings Corp., Fiserv Inc., and Sungard Data Systems Inc. all of which are now publicly traded. Earlier this year, Nashville-based Comdata agreed to be acquired by Ceridian Corp. for $900 million, with a good chunk of that sum is going to Welsh, Carson and their clients. Another big score for Welsh Carson was the leveraged buyout of Citicorp's merchant processing business, Card Establishment Services. The business, bought for $175 million in 1992 was sold to First Data Corp. two years later for a whopping $680 million. In addition to staking outsourcing firms like Bisys and Fiserv, Welsh Carson has invested in software firms with a financial services bent. For example, last year it bought Servantis Systems Inc., a developer of home banking systems, from Nynex Corp. Technology executives who have worked with the firm say its stellar success has been based on the its focuses on only two industries, and the Welsh, Carson executive maintain close working relationships with the management teams in which they invest. That's because Welsh Carson's management has experience that goes well beyond the financial wizardry of Wall Street. Partner Bruce Anderson was previously a senior executive at Automatic Data Processing Inc., one of the earliest and most successful payroll processing companies. Another partner, Richard Stowe, is an engineer by training. The firm's two other founders, Patrick Welsh and Russell Carson, came from Citicorp's venture capital group. With its latest cash infusion from the new limited partnership, officials said Welsh Carson now manages aggregate capital of $3.5 billion, and is one of the largest sources of private equity in the country.
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