Catterton Partners Preps For Seventh Buyout Fund

Firm: Catterton Partners

Fund: Catterton Partners VII LP

Target: $1.25-$1.5 billion

Placement Agent: None

Catterton Partners, a specialist in food, retail, media and consumer products, plans to raise its seventh fund early next year, a source familiar with the firm’s plans told Buyouts. The target is expected to range from $1.25 billion to $1.5 billion.

The Greenwich, Conn.-based shop has invested almost 60 percent of its $1 billion sixth fund, raised in 2006, which followed a $650 million fifth fund raised in 2003. In March, the firm closed a $300 million growth fund earmarked for smaller deals requiring $10 million to $30 million in equity, as first reported in Buyouts in December 2007.

The firm, which manages $2 billion altogether, does not intend to hire a placement agent to help it raise the fund. Catterton Partners employs 26 investment professionals, including 10 partners, seven principals and nine associates.

Catterton plans to pursue the same strategy and the same size investments with Fund VII: It typically cuts equity checks of $30 million to $100 million to acquire North American mid-market companies in food and beverages, retail and restaurants, consumer products and services, and media and marketing services. The shop has completed more than 60 investments since its inception in 1990, and its recent deals include the acquisition of Restoration Hardware Inc., a home furnishing retailer that it bought alongside Tower Three Partners LLC in June for about $179 million.

Investors in prior Catterton Partners funds include AlpInvest Partners, Colorado Fire & Police Pension Association, and the Employees’ Retirement System of Rhode Island. LPs should be pleased with two notable recent exits: the sale of natural pet food maker Wellness Pet Foods in which Catterton Partners earned about 7x its investment through its recent sale to the Berwind Group; and the sale of luxury hair product company Frederick Fekkai & Co. for more than $400 million in April in a deal that earned the firm more than 4x its money.