From restaurants to casinos to Mrs. Fields cookies, Z Capital Group is all about portfolio companies in the people-pleasing business. Now, the New York-based firm is seeking to raise its largest pool of capital yet for new consumer-centric deals, setting a $1 billion target for its Z Capital Partners III vehicle, according to an SEC filing.
If that target is reached, it would make for the largest fund in firm history, surpassing Z Capital Special Situations Fund II, which closed on $750 million in 2014.
For a firm that completes relatively few investments—no more than seven in any year since its formation in 2006—Z Capital boasts an outsized number of well-known names in its portfolio, including the parent company of Mrs. Fields and TCBY and restaurant chains such as Chevys Fresh Mex and Pink Taco. The vast majority of the firm’s deals are in the B2C sector: more than 80%, according to the PitchBook Platform, with a smattering of transactions in the B2B and materials & resources spaces making up the remainder.
Z Capital’s biggest deal to date has been February's take-private buyout of Affinity Gaming, a casino operator, at a valuation of $580 million. Z Capital had been a shareholder in the company since 2014 but announced its plans to take control of a majority stake in August.
And why does Z Capital think it will be able to reach the $1 billion mark for its latest fund? Surely one factor is the success of the vehicle’s predecessor. The firm’s $750 million second fund had an IRR of 24.5% as of the end of 3Q 2016, per the Platform, which ranks in the top quartile of its peer benchmark.
After additional info on Z Capital Group's past fundraising, investments, management team and more? PitchBook Platform subscribers can check out the firm's profile right here.