LNK Finds LPs Greedy for an Industry-Focused Fund

Breaking out from Apax Partners last year, LNK Partners has raised its first fund after six months in the fundraising trenches. The White Plains, N.Y., based fund plans to invest only in the consumer and retail sectors. It beat a target of $275 million and capped itself at $400 million late last month.

The group includes David Landau, former head of Apax’s consumer and retail group; Henry Nasella, a former venture partner with Apax, who previously served as chairman and CEO of Star Markets and as president and COO of Staples; and Bruce Klatsky, former chairman and CEO of apparel and footwear company Phillips-Van Heusen.

The fund will invest in buyouts, recaps, growth equity and PIPEs. Credit Suisse was the placement agent on the fund. “We’re really focused on backing management teams, supporting them with our operating expertise and providing access to our network of relationships,” said Landau.

A major aspect of the fundraise was the tapping of 60 senior executives in the consumer and retail industries to invest personally in the fund. The concept, according to Landau, serves to tighten the bond between LNK and these executives, some of whom are friends, and all of whom could be potential business partners down the road in one way or another. Those investments are also touted by Landau as evidence of his firm’s insider status in the industry.

“We talked to people whom we have had long relationships with. They were saying, ‘We’d like to back you,’ and we realized this was something we could offer friends who’d helped us in the past. They are people we know and we are going to turn to in supporting the companies we invest in—it’s a linkage they now have to us which is more than friendship.”

Landau said above all, LNK is looking for a firm that wants a partner and a good relationship. “It’s not just about the last nickel,” he said. Landau noted that every CEO he and his team have ever backed are investing in this fund. “We’re very disciplined in the kinds of companies we back. Once we decide to partner with a management team and company, we then become flexible. We can do $20 million, $100 million, or $150 million as a minority or majority shareholder.”

The firm started fundraising in September. Landau said he and Nasella had told Apax they would be leaving in early 2005. With six investment professionals, the firm hasn’t completed any deals yet but is looking. —M.C.