Seidler Equity Partners completes $800m Fund VII inside three months

Seidler Equity Partners VII’s swift close owes mostly to re-up commitments by existing institutional investors, many of them long-time backers of Seidler pools.

Seidler Equity Partners, a low-profile private equity firm that started out as a family office, closed its seventh mid-market fund, raising $800 million, a person with knowledge of the matter told Buyouts.

Seidler Equity Partners VII wrapped up in mid-March at its hard cap, the person said, after little more than two months of marketing. The firm was “lucky,” the source said, to have been in the final stages of paperwork with global investors when the market effects of the covid-19 outbreak were first being felt.

Seidler also raised its prior vehicle quickly, Buyouts reported in 2017, with Fund VI taking less than 60 days to reach its $600 million hard cap.

Fund VII’s swift close owes mostly to re-up commitments by existing limited partners, the person said, many of them long-time backers of Seidler pools. They include endowments and foundations, family offices, funds of funds and insurers based in North and South America, Europe, Asia and Australasia.

Seidler was founded in 1992 as a family office by brothers Peter and Robert Seidler. A third founder, Eric Kutsenda, came onboard for the 2000 launch of the firm’s debut institutional fund.

Operating from offices in Marina Del Rey, California, and Sydney, Seidler makes majority and minority investments in high-growth companies, typically with EBITDA of $10 million to $50 million. Opportunities are targeted worldwide but with most deal flow sourced in the US, Australia and New Zealand.

The strategy is sector-agnostic, with Seidler investing in everything from chemicals and consumer goods to education, healthcare and manufacturing. Deals, ranging from acquisitions, growth equity investments, management buyouts and successions, are “situationally driven,” the source said, and focused on partnerships with family- and founder-owned businesses.

A key aspect of the strategy is a long horizon, with portfolio companies sometimes held for a decade or longer. A good example is LA Fitness, a fitness club operator, which Seidler backed for 16 years prior to a recap transaction completed in 2016. Madison Dearborn Partners was also an investor in LA Fitness.

Seidler also makes limited use of leverage in its deals. The emphasis on a conservative capital structure, the source said, is important to portfolio companies now preparing for a coronavirus-driven slowdown.

One of Seidler’s best known investments is Rawlings, a sports equipment maker, acquired two years ago from Newell Brands for $395 million. The firm partnered in the deal with Major League Baseball. Peter Seidler is the general partner of the San Diego Padres and an investor in the ball club.

Fund VI is almost fully invested, the source said, with one platform investment left to make. Fund VII, which will invest in up to a dozen businesses, is expected to do its inaugural deal later in 2020.

Seidler’s most recent disclosed investment is Carus, a maker of chemicals for environmental applications. The firm agreed in mid-2019 to back Carus’ organic and acquisition-led growth plan.

The Seidler brothers and Kutsenda are part of a nine-person leadership team. The other partners are Tom Denot, Chris Eastland, Leonard Lee, Eric O’Brien, Tobin Ryan and Matt Seidler. Ryan is the brother of Paul Ryan, the former speaker of the US House of Representatives, who joined Seidler last year as a senior adviser.

Action item: Reach Seidler Equity Partners at its Marina Del Rey office at 213-683-4622.

(Update: This story was updated to clarify Seidler Equity Partners’ ownership of and 2016 exit from LA Fitness.)