For years Atlanta-based Roark Capital Group has been raising money on an as-needed basis whenever a good deal would arise. According to recent Form D filings logged with the Securities and Exchange Commission, that will soon change, as the firm is well on its way to raising its first institutional vehicle. Roark has so far closed on $241 million, and if its target is met, is expected to reach $400 million.
The fund has been fairly well received by limited partners. One investor at a large institutional advisory firm said, “They’ve got a very interesting story. They’ve been using somewhat of a pledge fund structure for a while, and they’ve been backed by some really smart and talented private-equity people… They also have a good track record and they’re based in Atlanta, which is kind of unique.”
Additionally, as limited partners continue to keep their eyes open for new and emerging fund managers, the source said, “Roark would certainly qualify as that.”
According to the SEC filings, Lazard Freres & Co. has been hired as the placement agent to market the fund and Roark is also raising a parallel vehicle that is included as part of the $400 million target. The filings identify that 41 accredited investors have already committed to the funds, including the Princeton University Investment Co., RCP Holdings, Gabriel Capital’s J. Ezra Merkin, Tangent LLC, AJG Family Limited Partners and High Rise Capital Management’s Arthur Zankel.
Neal Aronson, the founder of Roark, launched his career in the Drexel, Burnham, Lambert corporate finance department, and from there had stops at Acadia Partners and Odyssey Partners. Aronson went on to co-found U.S. Franchise Systems, a hotel franchiser, which was acquired by the Pritzker family in 2000. The following year, Aronson started Roark, naming the buyout shop after the protagonist in Ayn Rand’s The Fountainhead, Howard Roark.
The firm’s typical equity investment ranges from $15 million to $125 million, and Roark will invest in LBOs, recapitalizations and growth capital transactions. On its website, the firm identifies a focus on multi-unit franchise, consumer brands, packaging, niche manufacturing and service companies.
Given Aronson’s history and success in the franchising space, the firm has appeared to concentrate on this area in particular and has made a number of franchise company investments, including buyouts of Carvel, Cinnabon, Fastsigns and Money Mailer. Additionally, last year, the firm acquired Pike Family Nurseries, an Atlanta-based lawn and garden center.
Firm: Roark Capital Group
Fund(s): Roark Capital Partners, LP and Roark Capital Partners Parallel, LP
Raised to Date: $241M
Placement Agent: Lazard Freres & Co.