Private equity fundraising falters in Q3

Private equity fundraising lost some of its sparkle in the third quarter, according to Buyouts editor Greg Roth. U.S. pension funds, endowments and other limited partners all have began to pull back in the wake of renewed market upheaval and the possibility of a double-dip recession. What this means, according to private equity executives and placement agents, is the likelihood of intensifying competition for a shrinking pool of money.

That could ultimately lead, they say, to a bitter reckoning for a growing number of firms as the money that these firms hoped to raise simply isn’t there. If the trend holds, greater competition for less money could also foreshadow cuts in revenue and employment at private equity firms, and further tilt the balance of power between LPs and general partners—as far as terms and fees—more squarely in favor of LPs. Despite the third quarter slump, the fundraising market this year still has a solid chance of surpassing the depressed amounts raised in 2009 and 2010. Indeed, by recent historical standards, current fundraising levels are a mere fraction of what they were prior to the financial crisis.

“I get the feeling that investors are getting a lot more careful,” said Bill Barnum, a partner at Brentwood Associates, a middle-market buyout shop in Los Angeles that anticipates raising its next fund within a year. “And it’s probably going to be even worse in the fourth quarter. A lot of LPs are out of money by the end of the summer. In the end, that probably makes fund sizes a little smaller and the fundraising process a little longer. And at the margin, it will probably squeeze some people out as well,” he said.

October 8th, 2012|Categories: Client News|Tags: , , , , |

K-MAC Holdings acquires No Limits, LLC

K-MAC Holdings Corp. announced today that it has acquired No Limits, LLC, a Missouri-based Taco Bell franchisee that owns and operates 25 Taco Bell restaurants. K-MAC is one of the largest Taco Bell franchisees in the U.S. and also operates KFC and Golden Corral restaurants. It currently operates 237 restaurants across the three different brands.

K-MAC is owned by Brentwood Associates, a leading Los Angeles-based private equity investment firm, which made its initial investment in K-MAC in March 2011.  “This acquisition allows K-MAC to extend its reach and propel its growth,” said Brentwood Associates Managing Director Rahul Aggarwal. Brentwood Associates’ other portfolio companies in the restaurant industry include Pacific Island Restaurant, Zoe’s Kitchen and Veggie Grill.

September 24th, 2012|Categories: Client News|Tags: , , , , |

Brentwood Associates acquires Soft Surroundings

Soft Surroundings, a leading direct marketer and specialty retailer of branded apparel, accessories, beauty products and home furnishings, announced it has sold a majority interest in the company to form a strategic partnership with Brentwood Associates, a leading consumer-focused private equity firm. Dow Jones reports the deal at $150 million to $200 million.
“Brentwood invests in authentic, differentiated brands led by exceptional management teams, whose focus on accelerating growth can leverage our broad industry and business expertise,” Eric Reiter, a partner with Brentwood Associates, said in the interview with Dow Jones. “Soft Surroundings has carved out a unique niche within the women’s apparel market, targeting an underserved consumer and bringing her special products and a unique customer experience.”
August 8th, 2012|Categories: Client News|Tags: , , , , |

Brentwood Associates plans to grow Sundance Catalog

Brentwood Associates, the Los Angeles-based private equity firm, plans to triple or quadruple the volume of Sundance Catalog, a company it acquired earlier this week.

Sundance Catalog, Brentwood’s main business, is a multichannel direct marketer and specialty retailer with current annual sales estimated at $150 million. Women’s Wear Daily reports that selling shareholders, including ACI Capital and Webster Capital, will retain a minority stake.

“We’re looking for significant growth,” said Eric Reiter, a partner at Brentwood Associates. “The opportunity to grow catalogue sales, e-commerce and retail is huge. When you get the retail machine working, there’s significant growth potential. It has the potential to really scale as a business.”

Sundance Catalog was launched in 1989 by Robert Redford. It grew out of a small general store at the base of Sundance Village, the community Redford founded in 1969 to foster artistic pursuits while preserving the land in Utah’s Wasatch Mountains. Sundance Catalog currently operates stores in Corte Madera, Calif., and Denver.

“There’s clearly an opportunity for 15-plus stores over next couple of years,” Reiter said. “Our customer exists across the country. There’s a big incentive to make retail work because multichannel shoppers are the biggest spenders. We’re also going to find new ways to reach our potential customer such as social media. The brand is global,” he said, adding that Sundance could expand internationally.

July 17th, 2012|Categories: Client News|Tags: , , , , , |