ACON Runs Through Newly Closed Fund

Firm: ACON Investments

Fund: ACON-Bastion Partners II LP

Target: $300 million

Amount Raised: $375 million, plus $190 million for co-investments

ACON Investments, a firm supported by TPG founder David Bonderman, is quickly putting its newest fund to work, having deployed the vehicle’s capital on four closed deals as well as two more scheduled for completion by summer’s end.

The Washington, D.C.-based buyout shop closed the fund, Acon-Bastion Partners II LP, earlier this year with $375 million in commitments, well above the original $300 million target. The firm also raised a side fund of $190 million to co-invest in deals that are slightly larger than the $375 million fund can handle, giving the firm a total of $565 million in capital.

ACON Investments, which manages $1.5 billion, expects to buy a financial services company and a company in retail-related manufacturing by the end of the summer, Daniel Jinich, a managing partner, told Buyouts.

The firm has closed four deals since it started raising the fund in 2006. In January 2007 it bought Peter Piper Inc., a pizza restaurant chain. It followed that up with the acquisition of Spencer Gifts LLC, a specialty retail store. In November 2007 it bought Milagro Exploration, an oil and gas exploration and production company, and in April it bought Chroma Oil & Gas LP, another oil and gas exploration and production company.

Investors in the fund include major pensions such as the California Public Employees’ Retirement System and the California State Teachers’ Retirement System, as well as Bonderman. TPG had invested in ACON Investments’s earlier fund focused on Latin America, Jinich said. Bonderman followed that up by committing his own money in the new fund, said Jinich, who declined to say how much Bonderman contributed. “He’s a very large and special investor in the ACON funds,” he said.

The name of the fund derives from Bastion Capital Corp., a Los Angeles-based firm that Managing Director Guillermo Bron co-founded. Bron had personally invested in some ACON Investments deals and knew the team through business contacts. Both firms shared similar interests, and Bron joined ACON Investments when Bastion Capital’s fund wound down in 2005 and Bron’s partner, former Dallas Cowboy kicker and Univision Co-founder Daniel Villanueva, decided he wanted to do more early stage deals.

Acon-Bastion Partners II LP targets United States-based companies in energy services, retail, media and financial services, although its managers will look at deals in other sectors. The firm typically invests $20 million to $100 million of equity in deals with total values of $50 million to $350 million. With the co-investment pool it can commit up to about $150 million on a deal, Jinich said. ACON Investments has a separate fund dedicated to Latin America.

The firm has offices in Los Angeles, Houston and Madrid.