North Castle Partners Preps Fund IV

Fresh off scoring a 5x return on its sale of diet company Atkins Nutritional Holdings, healthy living investor North Castle Partners LLC is getting ready to raise its fourth fund, Managing Director Lou Marinaccio told Buyouts.

The Greenwich, Conn.-based shop will most likely target $250 million for the fund, he said. The firm is in preliminary discussions with limited partners about the fund and plans to begin a formal process in 2011. Firm executives have not decided on a placement agent.

North Castle, founded in 1997, targets lower mid-market consumer companies focused on healthy living that generate annual revenues of $10 million to $200 million.

The firm raised $200 million for its previous fund in 2007, and has enough capital left for two or three more deals, Marinaccio said. North Castle’s investors have included Caisse de Depôt et Placement de Quebec, the Ontario Municipal Employees Retirement System and the Teachers Insurance and Annuity Association College Retirement Equities Fund.

North Castle capped the year with the sale of Atkins to Roark Capital Group. Terms of the deal weren’t disclosed, but North Castle made 5x its invested capital.

The firm added two portfolio companies in 2010: IBEX Outdoor Clothing LLC, a Woodstock, Vermont-based maker of wool outdoor apparel, and Saline, Mich.-based premium flatbread maker Flatout Inc.