L Catterton continues to raise funds for the 10th iteration of its flagship private equity buyout fund.
According to an SEC filing, the $34 billion AUM consumer brand-focused PE manager has amassed $5 billion for L Catterton X as of March 18, against its target of $6.5 billion.
Its efforts come at a time when funds with at least $5 billion in commitments are taking more time to raise capital, and deals in the consumer sector have slowed.
PitchBook’s 2023 Annual US PE Breakdown shows mega-funds are still securing capital from LPs, but they are taking longer to close compared to the previous two years. L Catterton X, for example, has been in the market for 27 months, while the average buyout mega-fund took 10.8 months on average to close between 2006 and 2023. Last year, that average crept up to 14.6 months for the group.
In addition to L Catterton, Vista Equity Partners, which focuses on enterprise software, and Platinum Equity, specializing in corporate carveouts, are currently in the market with buyout mega-funds that launched in late 2021, the report shows. The two were valued at $17 billion and $10.66 billion, respectively, coming into this year.
L Catterton’s flagship buyout fund family focuses on middle-market, growth-stage companies across North America and Europe, with check sizes ranging between $75 million and $500 million.
Its predecessor, Fund IX, closed on roughly $5 billion in 2020, The Wall Street Journal reported. The amount surpassed the firm’s $4 billion target.
The firm’s investments include its approximately $680 million acquisition in October of Thorne HealthTech, a provider of health supplements and tests, and its 2021 buyout of Birkenstock, which has since gone public, that valued the popular footwear brand at $4.35 billion. And this year, L Catterton made a significant stake in AmaWaterways, a luxury river cruise line.
Its fundraising efforts, however, come amid a somewhat sluggish time for B2C deals. According to PitchBook’s 2023 Annual Global M&A Report, consumer deal activity has declined over the last few quarters.
“Slow exit activity disrupts the cash flow back to LPs to recycle into new fund commitments,” said Jinny Choi, a PitchBook PE analyst.
“The M&A opportunity set has been volatile in the consumer space because of the headwinds from high inflation and weak consumer sentiment,” she said. “Many PE investors ... pursued smaller acquisitions that were more digestible as larger transactions were harder to finance.”
As inflationary expectations stabilize and consumer confidence grows, Choi said, M&A activity in the consumer space is expected to improve later this year.
L Catterton declined to comment on its fundraising.
Featured image by Lucia Chirila/Getty Images
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