Deal-by-deal shop MFG Partners eyes debut fund launch

MFG Partners, a New York-based shop that has been operating deal-by-deal for several years, is prepping its debut commingled fund that is expected to launch early next year, sources told Buyouts.

First-time and emerging manager fundraising has slowed greatly in the tougher fundraising market, with limited partners choosing to mostly stick with their deepest relationships. First-time funds globally raised around $6 billion in the first quarter, compared to $67 billion for all of 2022, according to Buyouts data.

MFG will test the markets. The firm, formed in 2016, will target in the range of $300 million to $350 million, two sources said. It’s not clear if a final target has been set. Fund I is expected to hit the market officially in the first quarter, one of the sources said.

MFG was founded by partners Jeff Mizrahi and Jonathan Schilowitz. Mizrahi, formerly a partner at Sand Oak Capital, declined to comment. Before, he worked at York Capital on the special opportunities fund as well as at Lindsay Goldberg.

Schilowitz previously worked at Partners Group, where he was focused on the industrials sector. Prior to that, he worked at Kohlberg & Co, according to his biography on the firm’s website.

The firm makes control buyouts, recapitalizations, growth equity and strategic partnerships with founder and family-owned businesses in the $25 million to $100 million transaction value range. MFG makes investments in industrial and manufacturing, distribution and business-to-business services.

In November 2022, the firm announced an investment in CST (comprising Chuck’s Septic Tank and Drain Cleaning, Inc, CST Utilities and I-Bore) in partnership with PNC Mezzanine Capital and Centerfield Capital. The deal was MFG’s eighth platform investment, according to a statement at the time.

Its portfolio includes Mail Communications Group, Elgen, AZ Wire & Cable and Mellott. Its realized investments are LCR Contractors, Alliance Environmental Group and Storage Solutions.

MFG is among several lower and mid-market emerging managers trying to raise in the challenging markets. Astira Capital, formed earlier this year by Azra Kanji, a former partner at Abry Partners, closed its debut fund on $675 million; and Interlock Equity, established by ex-RLH executives, closed its maiden fund on more than $390 million.

Check out Buyouts’ extensive database of emerging managers, including first-time funds, with funds in the market here.