Slimmed-down Trilantic North America targets $3bn for Fund VII

Fund VII will concentrate on investing in mid-market companies in business services and consumer sectors, relinquishing a prior focus on energy.

Trilantic North America, spun out of Lehman Brothers Merchant Banking in 2009, is seeking $3 billion for a seventh mid-market buyout offering.

The target for Trilantic Capital Partners VII (North America) was disclosed in a report prepared for Plymouth County Retirement Association. It is expected to wrap up during the second quarter of next year.

At $3 billion in size, the new vehicle would be slightly larger than Fund VI, closed in 2019 at $2.75 billion. Trilantic declined to comment.

Fund VII will feature a slimmed-down version of the strategy deployed by its predecessors. It will concentrate on investing in business services and consumer sectors, relinquishing a prior focus on energy. This follows Trilantic’s decision to allow its energy team to strike out on their own.

The decision resulted in the January launch of a new firm, Greenbelt Capital Partners, led by ex-Trilantic managing partner Chris Manning. An investor in energy and energy transition themes, it retains a link with Trilantic, sharing organizational resources and providing advice on legacy investments.

Fund VII will build on Trilantic’s track record of making mostly control investments in North American family, founder and/or entrepreneur-led mid-market companies with values of $100 million to $1.5 billion and operating across business services and consumer sectors. Equity checks will range from $100 million to $300 million.

Post-investment, the fund will back company growth plans by implementing value-creation initiatives, such as investing in IT infrastructure and capabilities and preparing for tech transformation in end-markets, PCRA documents said. This will be supported by Trilantic’s preference for relatively low leverage, which affords greater economic adaptiveness.

Trilantic’s unrealized non-energy investments total 20. Additions this year include TSC Miami, a customized merchandise printing and fulfillment services platform. Another is Addison, a professional services provider specializing in talent solutions, which re-entered Trilantic’s portfolio through a recap deal.

Existing portfolio companies have also been active this year doing add-on deals. An example is RoadSafe Traffic Systems, a traffic control and pavement-marking services provider. Bought in 2021 by Trilantic and Investcorp, RoadSafe is undertaking M&A at a moment when the US is set to revamp road infrastructure, PE Hub reported in April.

As of June, Fund VI’s business services and consumer investments were generating a 1.6x gross multiple and 30.9 percent gross IRR, according to PCRA documents. Similar Fund V investments were generating a 2.5x gross multiple and 33.4 percent gross IRR.

Trilantic is led by managing partners Charlie Ayres and Danny James, part of the group that in 2009 acquired Lehman Brothers Merchant Banking from the estate of Lehman Brothers. Europe’s Reinet Investments partnered in the spinout and continues to hold a stake in the firm.

The original Trilantic invested in both North America and Europe, but in 2013 the organization was divided into the separately managed Trilantic North America and Trilantic Europe.

Ayres and James oversee a team of more than 50 professionals based in New York and Austin. They include nine other partners, among them Kristin DePlatchett, head of investor relations, who was profiled by Buyouts’ Off-duty series in June.