Consumer shop Brynwood Partners VII fund reaches $400M hard cap in one close

Hendrik Hartong III, senior managing partner at the Greenwich, Conn., firm said the fund marks the largest in the 29-year history of the consumer-oriented buyout shop, which currently manages $900 million in assets.

Brynwood launched its fundraising effort in April and did not use a placement agent, Hartong told Buyouts.

LP interest was driven by “very strong” returns in Fund V and Fund VI, boosted by realizations, he said. Recent exit deals include the sale of Sun Country Foods to Continental Mills for an undisclosed price in December, and the divestiture of the TrueNorth snack brand and assets to B&G Foods Inc in May.

The vintage 2005 Brynwood Partner V LP turned in an internal rate of return of 14.2 percent as of Dec. 31, 2012, according to data compiled by Buyouts.

“We’ve demonstrated a unique capability in our space, combined with a team that’s been together for a long time…and we’ve been working on a specific strategy,” Hartong said. “All those things led to a lot of support from our existing limited partners.”

In one fresh deal, Brynwood Partners VI LP formed Lightlife Foods Inc as a platform after buying the business from ConAgra for an undisclosed sum in a transaction announced Sept. 16. Lightlife operates a manufacturing operation in Turners Falls, Mass., and makes vegetarian-based burgers, hot dogs and other meatless frozen and refrigerated items.

Other companies in Fund VI include Back to Nature, High Ridge Brands — which includes Zest soap and Alberto VO5 shampoo — Newhalll Laboratories Inc and Pearson’s snacks.

The firm disclosed $120 million raised out of a $400 million target for Brynwood Partners VI LP, according to a Form D filing in Oct., 2008. Hartong said the fund ultimately raised $305 million.

“We raised money in a tough time and invested in a tricky time,” Hartong said. “Fund VI was probably our best fund ever and it also contributed to our [fundraising] success in Fund VII.

Returns in the lower middle market are primarily driven by operational improvements at the portfolio company level, Hartong said in a prepared statement.

Brynwood is actively pursuing new platform investments for Brynwood VII, while hunting for add-on acquisitions for the five portfolio companies in Brynwood Partners VI, Ian MacTaggart, managing partner of the firm, said in a prepared statement.

Hendrik Hartong Jr co-founded the firm in 1984 after serving as COO of The Pittston Company and CEO of The Brink’s Co. Brynwood’s first investment was in Air Express International Corp in 1985.