Sun Capital closes $6bn fund

The Boca Raton, Florida-based turnaround private equity firm has closed its sixth fund on $6 billion – a 300 percent increase over its previous fund.

Sun Capital Partners has closed its sixth fund, Sun Capital Partners V, on $6 billion (€4.5 billion), well surpassing the fund’s $4 billion target.

The $6 billion fund marks a change in fundraising strategy for the firm, which closed its previous fund on $1.5 billion in 2005.

“We realised we couldn’t bring a buyout fund to market every two years,” said Richard Hurwitz, Sun’s vice president of communications and investor relations.

Raising a fund every two years, as Sun Capital had been doing, is “too disruptive to the deal flow” given the firm’s investment pace, Hurwitz said. “Last year we did 33 acquisitions; the year before, 30 – that translates into 18 platforms in ’06 and 15 platforms in ’05. And this year alone we’ve already acquired 10 platforms.”

As a result, Hurwitz said, Sun Capital has decided to raise larger funds with less frequency.

The underperformer/turnaround-focused firm will maintain its investment strategy, targeting small and mid-sized companies with revenues ranging from $50 million to $4 billion, Hurwitz said.

Sun Capital Partners V will begin investing in the next 60 to 90 days, with approximately 80 percent of its capital allocated to North America. Roughly 15 percent to 20 percent will be invested in Western Europe, while 2 percent will likely be invested in Japan.

The 17-year old private equity firm opened a 3-person Tokyo office last week. Sun has offices in Boca Raton, Florida, Los Angeles, New York, and affiliates with offices in London and Shenzhen, China.