FdG Gearing Up For Third Fund

Firm: FdG Associates

Fund: FdG Capital Partners III LP

Target: $450 million

FdG Associates is seeking a placement agent to help it launch its third buyout fund in the fourth quarter, a source familiar with the effort told Buyouts. Managers at the New York-based mid-market buyout firm plan to target around $450 million, though that goal might change slightly, according to our source.

Credit Suisse helped FdG raise its previous fund, the $310.5 million FdG Capital Partners II LP. Our source declined to say why the firm is not automatically tapping Credit Suisse again. FdG is two-thirds finished investing that fund, which closed in 2005. FdG did not have a placement agent to help it raise its first fund, a $205 million, 1999-vintage vehicle.

With eight realizations, the funds have returned 4x invested capital and achieved a gross internal rate of return of about 42 percent, our source said.

Previous investors in FdG funds include Massachusetts Mutual Life Insurance Co., New York City Retirement Systems and the Ohio School Employees Retirement System.

Executives at the firm declined to comment.

FdG targets mid-market companies in business and consumer services, distribution, light manufacturing, and retail and consumer products. It typically commits $15 million to $50 million of equity in buyouts, recapitalizations and growth-oriented investments. Its portfolio includes A&R Logistics, a Joliet, Ill.-based company that provides bulk transportation services to companies in the plastic resin industry; USA Bouquet, a Miami-based marketer, importer and distributor of floral products; and Hercules Tire, a Findlay, Ohio-based distributor of truck tires.

Most recently, FdG hauled in a healthy 5x return on its sale of Implus Footcare, a Morrisville, N.C.-based footwear accessories designer and distributor, to AEA Investors, another New York-based buyout firm.

David Gellman, managing director, founded the firm in 1995. Other senior executives include Doug Dossey, a managing director who joined the firm in 1998, and Howard Romanow, a managing director who joined the firm in 1998. The firm got its start as an investment office for two wealthy New York families before it began seeking outside backers.—B.V.