Wynnchurch Capital is targeting $1.4 billion for its fifth fund that will invest into the market with a slightly changed team.
Fund V is capped at $2.2 billion, according to an investment memo from Rhode Island State Investment Council. The fund has a 2 percent management fee and a 20 percent carried interest rate with an 8 percent hurdle rate, the memo said.
The fifth fund has a six-year investment period, which is longer than most firms that set out five-year investment terms.
Wynnchurch Capital Partners V has been collecting commitments from public pensions. It’s not clear how much the fund raised so far. Rhode Island State Investment Board and Nebraska Investment Council both recently backed the fund.
John Hatherly, Wynnchurch’s president and managing partner, did not respond to a comment request Tuesday. The firm, founded in 1999, is led by Managing Partners Hatherly, Frank Hayes and Chris O’Brien.
Wynnchurch targets corporate carveouts, distressed and underperforming businesses, growth and family-owned companies in the middle market.
Wynnchurch closed its fourth fund on $1.2 billion in 2014. As of Sept. 30, 2018, Fund IV was generating a 25.15 percent internal rate of return, according to performance information from Nebraska.
The firm closed its third fund on $603 million in 2011; $350 million for Fund II in 2006 and $163 million for its debut fund in 2000.
Wynnchurch was approached by about 10 firms over the past few years to sell a minority stake in its business, but is not likely to make such a move, Hatherly said at PartnerConnect Midwest conference last year.
Wynnchurch has had some high-level departures in recent years. Ian Kirson and Terry Theodore, former partners at Wynnchurch, left and formed Center Rock Capital Partners. The firm closed its debut fund on $580 million in 2018.
In December, Wynnchurch acquired Clyde Industries, which provides boiler efficiency/cleaning systems, spare parts and services for the global pulp and paper industry.
Action Item: Check out Wynnchurch’s Form ADV here: https://bit.ly/30iIHz2