CCMP Growth emerges as successor to CCMP Capital

A new firm has emerged from CCMP Capital, which spun out from JP Morgan in 2006, that will pursue a narrower strategy and focus on future fundraising, sources told Buyouts.

CCMP Growth is led by several of the same senior executives that have led the original CCMP.

CCMP Capital executives are investors in the CCMP Growth platform, sources told Buyouts.

Private equity firms rarely split off in an affiliate fashion, where the same executives continue to focus on investments in the parent fund as well as the new firm. Generally new firm formation happens without such support or connections to the former shop, with some splitting up in acrimonious fashion.

CCMP’s succession process occurred last year and the new shop has completed two investments with capital sourced from investors, sources told Buyouts. The succession happened as original CCMP was raising its fourth fund, which reported collecting an initial $42 million-plus last year after launching in 2020, according to Form D fundraising documents.

CCMP Capital is no longer raising Fund IV, sources said. Instead, limited partner conversations shifted to the CCMP Growth fund, sources said, which is in market with its first fund. It’s not clear if those original commitments were canceled or re-directed to the growth platform.

CCMP Capital, meanwhile, will continue to manage investments out of its third fund, which closed on $3.6 billion in 2014, as well as a $1 billion-plus continuation fund closed last year.

“CCMP Growth was formed to manage new investment activity as part of a planned generational transition,” one of the sources said. “All future fundraising activities will be done by CCMP Growth.”

The transition to CCMP Growth was about narrowing the firm’s investment focus, and making the firm “more targeted around younger partners,” said an LP with knowledge of the firm. It’s being viewed almost as a succession process, the LP said.

It’s not clear how much CCMP Growth is raising. A CCMP spokesperson declined to comment about fundraising.

New leaders

CCMP Growth is led by co-managing partners Mark McFadden and Joe Scharfenberger. Both executives also continue working on investments in the CCMP Capital portfolio, including facility management services company BGIS. The firm extended its hold over BGIS in a continuation fund deal completed last year.

McFadden and Scharfenberger continue to be co-managing partners at CCMP Capital, according to the website.

“CCMP Growth and CCMP Capital share certain back office personnel and certain investment professionals have duties and responsibilities with respect to each adviser,” according to CCMP Capital’s Form ADV.

Other senior executives at CCMP Capital – chairman Greg Brenneman and managing directors Timothy Walsh and Richard Zannino – will serve on an investment committee advisory board for the growth platform.

The firm’s two investments are: Mammoth Holdings, a car wash platform with more than 100 locations in the Southeast and Midwest; and Omnia Exterior Solutions, which provides residential roofing services and exterior remodeling services.

CCMP Capital focuses on buyout and growth investments in consumer, industrial and healthcare in North America. CCMP Growth is focused on consumer and industrial companies, targeting companies with enterprise values between $250 million and $750 million, according to its website.