Snow Phipps Group LLC Partners Ogden Phipps II, Alan Mantel and John Pless are launching a new buyout firm that will seek to raise as much as $1 billion for its first fund, Bloomberg Markets reported, citing people with knowledge of the matter.

Phipps confirmed the restructuring in an interview with Bloomberg, and said that the new firm will invest in light-industrial and business-service companies with enterprise values of $100 million to $500 million.

The new firm, which has yet to be named, will continue to be based at Snow Phipps' office on Manhattan's Madison Avenue and will manage the assets still owned by the private equity firm's first three funds.

The entire Snow Phipps employee base will transfer to the new firm, with the trio as managing partners. Phipps co-founded Snow Phipps with Ian Snow, who will transition to senior advisor and serve on the investment committee of the new firm.

Snow reportedly said in a statement that this is the right time for him to change his role and focus on other priorities as "SPG III nears the end of its investment period."

Phipps, Mantel and Pless did not comment on the fundraising plans, according to Bloomberg.