Sun Capital fundraising sets on $1.5bn

The mid-market firm has closed its fifth private equity fund, with nearly all previous investors returning for another helping.

Florida’s Sun Capital Partners has closed its fifth buyout fund on $1.5 billion (€1.2 billion), oversubscribed by approximately $500 million. The fund is three times larger than the firm’s last vehicle. 

“Fundraising was spectacular,” said Richard Hurwitz, the Boca Raton-based firm’s vice president for communications and investor relations. “Limited partners were very generous in continuing to support Sun Capital Partners.”

Hurwitz said close to 100 percent of the previous funds’ LPs returned to Sun Capital Partners IV. He declined to name them, but said they include corporate pensions, endowments and family offices.

Fundraising was spectacular.

Richard Hurwitz
Vice President, Sun Capital Partners

According to Sun Capital, the firm’s strategy will remain the same. “We buy turnaround and underperforming companies and we turn them around, bring them to normal earnings and sell them,“ Hurwitz said. “The business model has not changed in ten years.”

Sun Capital invests in small- to mid-market companies in a variety of sectors. The firm recently made a $25 million investment in music retailer Musicland, as well as reportedly extending a $300 million worth of credit to the chain. Last year, the firm partnered with New York-based hedge fund Cerberus Capital to buy discount retail chain Mervyn’s from Target in another high-profile retail deal.

Sun Capital was founded in 1995 by Rodger Krouse and Marc Leder, both formerly executives at Lehman Brothers. The firm’s first vehicle was a pledge fund that invested $28 million in capital. The second fund closed in January 2001 on $200 million, while fund three closed in April 2003 on $500 million.

Last August, Sun Capital closed a non-controlled securities fund on $300 million. That fund seeks out minority investments in underperforming companies, through bank, trade and mezzanine debt.