Fund Closes: Former GE Execs Hit First Close –

Wynnchurch Capital, formed last year by John Hatherly, the former head of GE Capital’s merchant banking unit, last month held an initial closing on $110 million for its debut fund, Wynnchurch Capital Partners LP, and is set to close on its first investment by the end of the month.

Hatherly, along with Principal Jon Tomes, the former director of GE Capital’s merchant banking group on the West Coast, and Principal Richard Renault, a Canadian investor who has a history of investing in underperforming companies, launched the fund in the middle of last year with a $250 million target.

The Chicago-based firm is looking to invest the fund in manufacturing and consumer product companies in the Midwest and Canada, with a particular interest in later-stage information technology companies.

Investors in the first closing include Caisse de Depot et Placement du Quebec, CIBC World Markets, DLJ Asset Management, Dundee Bancorp, GE Capital and Power Corp. of Canada. The firm’s principals committed approximately $24 million at this closing.

The fund has soft-circle commitments of approximately $50 million in anticipation of a second close on the fund this Spring. The principals have yet to decide if the second close will be a final one for the fund, Hatherly said, although the fund has a $300 million cap.

Telecom Secret

In a deal slated to close by the end of this month, Wynnchurch has committed to purchase $10 million of a $60 million convertible stock issue for a telecommunications company. Wynnchurch sourced the opportunity, but, given its size, brought in Bain Capital as a coinvestor, Hatherly said.

He declined to discuss further details about the deal.

Additionally, Wynnchurch has two other deals in the hopper that are “more preliminary,” Hatherly said, which should close in the next two to three months.

In order to keep up with robust deal flow, Hatherly said, the firm has hired an associate and vice president who will start March 1. He declined to provide further information about the new employees due to their individual circumstances with their former employers.