FdG Associates, a New York-based private equity firm focused on the middle market, has closed its second fund with $310 million in commitments.
FdG Capital Partners II closed a little above its $300 million target, and it increased the number of LPs that came aboard.
The New York-based firm’s last fund had seven LPs while fund II boasts 23. The LPs are made up of public and private pension funds, fund-of-funds, an insurance company, a leveraged lender, European investors, a number of family offices and high net worth individuals.
“We had to turn down capital, but at the same time we wanted to broaden our investment base,” says David Gellman, a managing director with FdG.
Some of the LPs in this fund include, JP Morgan Asset Management, the Employees Retirement System of Ohio and Mass Mutual Life Insurance. About 20% of the fund came from high net worth families, according to Mark Hauser, a managing director with FdG. “That is important to us because that’s how FdG started, with two families,” he says.
Although this is FdG’s second institutional fund, it is its third pool of capital. The firm’s first fund in 1995, was made up exclusively of Fisher and de Gunzburg capital. In 1998, FdG raised its first institutional fund, which had seven investors and closed with $205 million. The firm made 11 investments out of that fund.
FdG’s fund II, was launched in May 2004 and is already about 30% invested, having invested in three companies. It invested in River Ranch Food and Sunrise Windows earlier this year.
Most recently, FdG invested in to Hercules Tires, one of the largest tire distributors in North America and Canada. The company does about $350 million in revenue and was owned by 32 dealers through a co-op. FdG was brought in to help management get rid of the co-op structure.
While the value of this deal wasn’t disclosed, this deal was at the larger end of FdG’s target size range, according to a source.
The firm usually commits between $15 million and $50 million in equity to sponsor management buyouts, recapitalizations and growth-oriented capital investments in private and public companies.
FdG generally invests in business and consumer services, distribution, light manufacturing, retail and consumer products sectors. FdG’s usual investment life is five years, although they reserve the right to hold a company as long as 13 years.
“None of this is changing. Deal flow is strong where we operate and there are opportunities,” Gellman says. “We have a reputation for family recaps in the lower end of the middle market and we want to stick to what we are good at.”