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Monomoy Secures $280M For Turnaround Fund

Firm: Monomoy Capital Partners

Fund: Monomoy Capital Partners LP

Target: $200 million

Amount Raised: $280 million

Placement Agent: MVision

Legal Counsel: Kirkland & Ellis

For turnaround LBO shop Monomoy Capital Partners, doing deals early in the life of its first fundraising was key to netting commitments later on.

With the help of early commitments, Monomoy founding partner Stephen Presser said the firm was able to complete transactions quickly. This, in turn, helped fundraising, since Monomoy could demonstrate by example to prospective limited partners just what its strategy was. “We could show people exactly how we bought companies and precisely what we intended to do to improve what we bought,” said Presser.

The fundraising ultimately took a year, leading up to its final closing on $280 million, ahead of its $200 million target, in early January. Placement agent MVision “invested heavily” in the fund, said Presser.

Monomoy wanted long-term LPs, which to Presser meant insurance companies, funds of funds and endowments and foundations. He added that much of the access to foundations and endowments came via funds of funds. The fund has some 18 institutional investors, as well as friends and family money. Presser said he was surprised by the amount of interest European investors had in the fund.

For example, top LPs in the partnership include European investor Horizon 21 (formerly Swiss Re). Other LPs include distressed funds-of-funds manager Drum Capital, Bear Stearns Asset Management, Oppenheimer & Co., St. Paul-Travelers, 747 Capital and Morgan Creek Capital.

About 70% of the commitments came from North America. Monomoy benefited from the “barbell strategy” employed by some LPs in which they invest in mega-funds and smaller market funds but avoid the middle market, Presser said.

Presser founded the firm in 2005 with Daniel Collin, Justin Hillenbrand and Philip Von Burg, all of whom came from KPS Special Situations Fund. Monomoy has invested $60 million over the last 18 months and owns a half dozen companies, some of which it has bought out of either bankruptcy or foreclosure. The firm hasn’t made any exits yet.—M.C.