Return to search

Mercato Partners collects $100m for second restaurant fund

Salt Lake City-based investment firm Mercato Partners has closed its second restaurant fund at $100 million.

Salt Lake City-based investment firm Mercato Partners has closed its second restaurant fund at $100 million. Savory Fund II’s limited partners include institutional investors, family offices, and financial services and advisory firms. The fund will target six to seven restaurant brands. Cooley LLP provided legal counsel for the formation of Fund II.

PRESS RELEASE

SALT LAKE CITY–(BUSINESS WIRE)–Mercato Partners today announced the final closing of Savory Fund II, its second investment vehicle devoted exclusively to backing emerging and profitable restaurant concepts, raising $100 million of commitments. The closing of Fund II builds upon the early success of the firm’s inaugural vehicle, which closed on $100 million of commitments in October 2020.

Limited partners in the fund consist of both existing and new investors, including institutional investors, family offices, and financial services and advisory firms. Seventy-two percent of investors in Fund I have committed to Fund II and will enjoy co-investment rights on a deal-by-deal basis.

Savory’s investment strategy focuses on partnering with proven, profitable food and beverage brands looking to expand beyond their founding region and build a culture of operational excellence. The fund is managed by General Partners Andrew K. Smith and Greg Warnock, along with an experienced F&B team of 65 professionals responsible for scaling Savory’s brands from 3-9 locations up to 40-50 locations nationwide.

Fund II will seek to partner with 6-7 new brands during its investment period. Since the inception of the Savory Fund Practice in 2018, the firm has deployed $65 million and allocated an additional $15 million of growth capital into five distinctive, emerging restaurant concepts – The Crack Shack, Mo’Bettahs, R&R Barbeque, Swig, and Via 313. Currently the firm is on pace to open over 40 locations across the portfolio in 2021, with 70 openings targeted for 2022.

“We are grateful for the continued support of our investors, especially after closing Fund I less than one year ago,” said Smith. “As one of the few firms operating in this industry niche, they understand our mission of partnering with leading entrepreneurs early in their business’ life cycles and accelerating their brand and operations nationally. The last year has shown that skilled, active managers can provide true alpha to investment portfolios beyond market rate returns. Striving for outperformance will always be a feature of Savory’s DNA.”

“Through the deployment of Fund I, we have developed a replicable playbook for success with five amazing companies, not only through the efficient use of capital, but also through on-the-ground operational assistance. We managed to do this despite operating during the most challenging time in the industry’s history. We are grateful for the perseverance of our founders and our loyal employees,” Smith continued.

“As the pandemic fades into memory, Savory is poised to take advantage of re-openings across the country, and the desire to eat outside the home and try new concepts. We are also deploying Fund II during a transition period in the commercial real estate market. Many sites have become available due to the effects of the pandemic, allowing Savory’s portfolio companies to secure new space in desirable locations. We expect this to continue during the life of Fund II,” Smith concluded.

“Swig partnered with Savory in December of 2017, and since then, our brand has experienced explosive revenue growth, approaching 300% from when we partnered,” said Chase Wardrop, President of Swig. “We have also been fortunate to open 13 additional stores as a partnership, with 17 more slated to open in 2021. Over the last few years, the Savory team has been instrumental in guiding us through the growth process, implementing their playbook on technologies, personnel and strategy necessary for our brand to scale. As a result, our teams have been able to adapt, and we were extremely well positioned during the unexpected challenges our industry faced during the pandemic. Swig is now poised for additional mind-bending growth in the coming years. Because we have the Savory team behind us, we feel prepared to execute better than ever.”

Cooley LLP provided legal counsel for the formation of Fund II.

About Savory Funds
The Savory Funds, managed by Mercato Partners, focus on delivering outsized returns through strategic investments in the food and beverage industry. Savory partners with high-potential, profitable, emerging restaurant brands, to deliver financial capital, industry expertise, revenue opportunities, profitability enhancements, and new location development. The Savory team contributes directly to all aspects of growth and replication by using a proven playbook and methodology. Founder involvement in the expansion of a brand is a central theme of the Savory approach, as founders carry the tribal knowledge around the uniqueness that has energized early success and is essential to future growth.

For more Information, visit savory.mercatopartners.com.

About Mercato Partners
Founded in 2007, Mercato Partners provides capital and guidance to firms in periods of high growth. Focusing on under-served markets, the firm structures majority, minority, and secondary positions in market leaders with demonstrated high organic growth rates. Known as a value-add investor, Mercato works with its in-house performance team and an extended network of advisors and service providers to accelerate growth. Across four distinct practices and $1B AUM, the firm actively invests in technology, branded consumer, and food and beverage companies helping them accelerate sales, market successfully and build and enable winning teams. For more information, please visit www.mercatopartners.com