Point 41 Capital, with Sun Capital pedigree, tests challenging market with debut

Point 41 Capital Partners, formed by two long-time Sun Capital executives, is seeking capital for its debut fund for investments in mid-market industrials and services investments.

The firm is part of a large group of managers trying to raise first-time funds in what is one of the most challenging environments for new products. The slow exit environment, dragged along by persistent high interest rates and more expensive debt, is preventing managers from delivering distributions to LPs. Without capital coming back, LPs are slowing the pace of their commitments and sticking mostly with their deepest relationships.

“Smaller and more up-and-coming firms are taking a lot longer to hit fundraising targets,” said an LP who commits with smaller funds.

Point 41, formed by Aaron Wolfe and Jordan Wadsworth, is targeting $300 million. The firm had talked about a higher target but settled on the lower one, potentially because of the market, according to a limited partner who has heard the firm’s marketing pitch.

Fund I has been raising since last year. It’s not clear how much it has raised so far. Wolfe and Wadsworth did not respond to a comment request.

As it fundraises, the firm also appears to be making deals. The firm filed early this month for an investment vehicle called Point 41 Capital Partners HVAC I, which raised about $52.8 million. Such filings generally indicate capital raised for a single asset. The filing said eight investors committed the capital.

Point 41 targets the North American mid-market. It looks for companies with enterprise value of $50 million-$400 million, and annual EBITDA of $7 million-$40 million. It will include transactions including corporate carve outs, founder and family-owned secondary buyouts, the firm said.

Wolfe worked for 18 years at Sun Capital before leaving and joining Arsenal Capital in 2020, which he left in 2022. Wolfe has worked in a range of sectors including engineered products, building products, flow control products, industrial technology and business services, according to Point 41’s website.

Wadsworth worked at Sun Capital from 2006-22, most recently as co-head of the business services practice, his biography said. He has focused on sectors like residential, facility, environmental and infrastructure, and transportation and logistics, the website said.

Other key members of the team include Jeff Feigenbaum, principal, who joined from Solomon Partners where he worked as a vice president. Before, Feigenbaum also worked at Sun Capital, his biography said.

Point 41 is raising what is surprisingly a crowded fundraising market, considering the challenge of attracting capital from liquidity-strained LPs. Other first-timers on the circuit include Coalesce Capital, Consello Capital, Otro Capital, MFG Partners and Citation Capital. Check out Buyouts’ extensive database of emerging managers, including first-time funds, here.