New Funds: Former Food Execs Close Debut Fund –

In a market where anything dotcom is mobbed by enthusiastic investors, two former food industry executives, William Voss and Terry Sebastian, are betting their dollars on the food industry. They have closed on their first private equity fund, Lake Pacific Partners, which is dedicated to investing in that sector.

The fund held a final close in January on $101 million.

Voss was an executive at Chicago-based Natural Nutrition Group Inc., a natural foods company and, with Sebastian, decided to become an active investor in the industry after selling off the company last summer to New York-based Hain Food Group Inc. “We wanted to change our stripes and play a new role as active investors in the industry that we know,” said Voss. “We were able to convince some people to back us and so here we are.”

Voss said the State of Wisconsin Investment Board is a major investor in the fund along with other high net-worth individuals.

“The food industry is huge,” said Voss. “We have been concentrating most recently in the industrial food area, which includes companies that make ingredients and additive flavors that go into food products. We like the arena because it is big and there are a lot of specialized products and it is very fragmented and that makes it an attractive sector to prospect in.”

The group is also interested in the area of package foods and will look for opportunities to do retail branded food products, said Voss. He also said the fund has been looking outside of the food industry at some houseware businesses and restaurants and food service equipment in related businesses. “We’re very actively looking at a number of different situations but have closed no transactions yet,” he said.

Voss said Lake Pacific will generally invest $20 million to $30 million in companies with revenues up to $200 million. “We don’t want to spread ourselves too thin and make too many small investments with the capital we have,” he said. Voss also said the fund would co-invest with other private equity funds in transactions up to $1 billion.

Lake Pacific Partners will invest in recapitalization, management buyout and co-investment transactions, said Voss. “We want to find good people in good situations where we think we can build value,” he added.

Other buyout firms having funds that invest in the food industry include Milwaukee, Wis.-based Horizon Partners and Boston-based J.W. Childs.