Windjammer Capital shoots for $1bn in launch of sixth mid-market fund

Windjammer Capital Investors is raising its first billion-dollar pool in a sixth offering geared to control investments in mid-market opportunities.

The $1 billion target for Windjammer Capital Fund VI was disclosed in materials prepared for Minnesota State Board of Investment. The offering was officially launched last October with Credit Suisse Private Fund Group as the placement agent.

If successful, Fund VI would be the largest vehicle in Windjammer’s more than three-decade history. Its predecessor, Windjammer Senior Equity Fund V, closed in 2018 at $870 million.

Established in 1990, Windjammer is led by three managing principals: Gregory Bondick, Costa Littas, who is one of the founders, and Jeffrey Miehe.

Over its lifetime, the firm underwent a major change in its strategy, beginning as a junior capital solutions provider and then transitioning in 2006 to mid-market buyouts. Fund VI represents Windjammer’s fourth vehicle since that transition.

Today, Windjammer makes mostly control investments of $50 million to $200 million in North American companies with EBITDA of $10 million to $50 million. The latter operate in five industry segments: niche manufacturing, specialty distribution, business services, healthcare and consumer and food.

Key characteristics of targets are a defensible position in fast-growing sectors, mission-critical products, strong management, predictable cashflow and value-creation opportunities, MSBI materials said. Another attribute is a history of generating a minimum return on net assets greater than 25 percent.

Typical deal types include buyouts, carveouts, partnerships with family-owned businesses, public-to-privates and recaps. Once in the portfolio, Windjammer works with companies to implement optimization initiatives, such as revenue enhancement, operational improvements and management team and board upgrades.

Windjammer reports completing more than 60 platform investments and over 160 add-ons. Its recent deals include last year’s acquisition of Radix, a manufacturer of specialty wires and cables serving high-temperature and fire protection markets, from High Road Capital Partners.

The firm has also been selling portfolio companies of late. In 2022, they included Hermetic Solutions Group, a solutions provider that houses and protects microelectronics in harsh environments, sold to Arcline Investment Management-backed Qnnect. HSG was acquired in 2019.

Windjammer Senior Equity Fund V was earning a 1.4x net multiple and a 22.3 percent net IRR as of September 2022, according to MSBI materials. Fund IV was generating a 2.5x net multiple and an 18.5 percent net IRR.

The managing principals oversee a Newport Beach and Boston-based team of investment, operations and business development professionals totaling more than 20. Among the senior team members are managing directors Matthew Anderson, Craig Majernik, Ryan Pertz and Robert Quandt.

Windjammer did not respond to a request for comment.