Eyes On Asia, Baird Capital Closes $300M Fund

Baird Capital Partners will bring more muscle—and an aggressive Asia strategy—to the lower middle market after closing this month on a $300 million target for its latest buyout fund.

Baird Capital Partners IV LP is nearly twice as large as the firm’s vintage 2000, $175 million fund, which is fully invested. Limited partners include American Family Mutual Insurance, Hexagon Investments, The Northwestern Mutual Life Foundation and Thrivent Financial for Lutherans. Managing Director Paul Carbone said his firm not only hit the $300 million target but raised virtually all of the money during a one-year period, which was also a goal for Fund IV.

The Chicago-based buyout shop has to date tapped Fund IV for three investments, including the acquisitions in February of Backyard Adventures and Leisure Time Products, formerly competitors in the wooden swing-set sector.

With this latest fund, the firm plans to maintain its focus on buying domestic manufactured products and business services companies valued between $25 million and $125 million with revenues ranging from $30 million to $200 million. According to Carbone, Baird Capital places great emphasis on effecting operational improvements within portfolio companies; the firm employs five operational partners vs. four investment partners, for instance.

Baird Capital has also struck one of the more dynamic overseas profiles among mid-market buyout shops in an effort to find suppliers and bigger markets for portfolio companies. The firm has offices in Hong Kong, Shanghai and Beijing, and last month the firm extended its Asia strategy to India by forging an alliance with Tholons Inc., a Bangalore-based professional services consultancy.

“We buy lower middle companies, but they don’t always have the tools, the access, the reach, the resources to fully take advantage of all global opportunities,” Carbone said. “We bring to the table those relationships and access and expertise to support the management teams in executing their strategies. We try to be more than 10 guys sitting in an office building.”—J.H.