CCMP closes ‘debut’ fund on $3.4bn

JP Morgan spin-out CCMP Capital has closed its first global fund, which will focus on buyout and growth equity opportunities.

CCMP Capital has closed a $3.4 billion buyout fund (€2.4 billion), the New York firm’s first since spinning out of US investment bank JP Morgan last year.

Marketed by placement agent Credit Suisse for approximately one year, CCMP II’s limited partners are primarily institutions, including corporate and public pensions and fund of funds, said Allison Cole, the firm’s vice president of investor relations.

“We had a pretty diversified group,” Cole said. “We had several returning investors and a lot of new investors as well.” The majority of limited partners are from North America, but some are from Europe, Asia and the Middle East, she added.

“CCMP II was met with considerable enthusiasm among investors and has a more diversified base of investors than our previous fund, which we also view as a strong endorsement of our investment approach,” Jeffrey Walker, CCMP chairman, said in a statement.

The fund’s strategy is somewhat similar to the group’s previous fund raised by the unit formerly known as JP Morgan Partners, which closed on $6.5 billion in November 2002. That fund included a sizeable commitment from the parent organisation.

“It’s not entirely different,” Cole said of the group’s investment strategy going forward. CCMP II will focus on the same five sectors, consumer, energy, healthcare, industrials and telecom. But the JPMorgan Partners fund, Cole noted, “was diversified in terms of investment stage and included venture investments as well as mezzanine. At CCMP, we are focused strictly on buyout and growth capital transactions.”

CCMP II’s typical deal size will range from $500 million to $3 billion, with the buyout firm writing equity cheques of $100 million to $400 million that allow it to take controlling positions, Cole said. Of the approximately 15 to 20 investments the fund will make, no more than 30 percent will be outside North America.

The fund has already invested in three companies. In April, CCMP won the €685 million auction for BOC Edwards, a vacuum equipment business previously owned by German engineering group Linde. In November 2006, the firm took private North American generator manufacturer Generac Power Systems in a $2 billion transaction, and in September 2006, CCMP was part of a consortium involved in the $8.3 billion buyout of cafeteria operator Aramark.

CCMP’s investments also include sandwich chain Quizno’s Sub, US managed healthcare provider CareMore Medical Enterprises, UK paint gun service company SafetyKleen Europe and business to business media company Hanley Wood.

The closing of CCMP II brings the firm’s capital under management to $10 billion.