GREENWICH, Conn. – Catterton Partners in March began marketing its fourth fund, which, targeted at $350 million, is more than twice the size of its previous vehicle.
Catterton Partners IV will tap a mix of institutional investors, such as gatekeepers, endowments, funds-of-funds and high-net-worth individuals. The firm expects an initial close in June, said Michael Chu, a managing director at the firm.
A spokesperson in the Greenwich, Conn. office of BT Alex. Brown, Catterton’s placement agent, could not be reached for comment.
The fund will back early- to later-stage deals, leveraged buyouts and private investments in public entities in the consumer goods and services categories, including e-commerce. Mr. Chu expects Catterton IV to back about 20 companies with an average of $15 million to $25 million each.
The firm decided to raise the bar for its latest vehicle because it invested its prior fund so quickly, putting $150 million to work in just 18 months.
“You don’t want to be out on the market all the time,” Mr. Chu said, referring to the continual need to raise capital. However, the firm wants to be able to hire new people at its own pace and to stay true to the types of deals it knows best, he added. Therefore, Catterton IV expects to invest larger amounts of capital than its predecessor fund.
Catterton-Simon Partners III closed on $150 million in late 1997 (VCJ, August 1997, page 18). That vehicle, three times the size of Catterton’s second fund raised in 1994, was the firm’s first fund to concentrate on the consumer industry. Catterton originally financed buyouts, acquisitions, recapitalizations and turnarounds strictly in the beverage industry.
The firm dropped “Simon” from Catterton IV’s name because it will be raised independent of William E. Simon & Sons, the later-stage investment firm that was both a principal and an investor in Catterton III. William E. Simon will invest in Catterton IV, but will not serve as a principal. The firm currently is raising its own later-stage private equity fund.