Blue Sea racks up $430m for second fund

Blue Sea Capital has closed its second fund at $430 million, beating its $350 million target.

Blue Sea Capital has closed its second fund at $430 million, beating its $350 million target. Blue Sea Capital Fund I LP will invest in the healthcare and industrial markets. The fund’s limited partners include funds-of-funds, insurance companies, corporate and public pensions, financial institutions, consultants, multi-family offices, endowments and foundations. Lazard was placement advisor to Fund II while Kirkland & Ellis LLP served as legal counsel.

PRESS RELEASE

WEST PALM BEACH, FLA. – February 1, 2021 – Blue Sea Capital LLC (“Blue Sea”), today announced that it has successfully closed Blue Sea Capital Fund II LP and Blue Sea Capital Executive Fund II LP (collectively “Fund II”), a $430 million private equity fund. Fund II included a $30 million investment by the General Partner and was significantly oversubscribed, surpassing its target of $350 million and exceeding its predecessor, Blue Sea Capital Fund I LP (“Fund I”), by over 30%. Consistent with the strategy of Fund I, Fund II will focus on partnering with exceptional entrepreneurs to build best-in-class, high-growth, enduring platforms within attractive sub-sectors of the healthcare and industrial end-markets.

“We are thankful for the strong support of our existing limited partners, particularly given the challenging external environment, and are excited to add a select group of new investors,” said Managing Partner, J.R. Davis. “We are proud of the firm we are building, with a foundation of success in supporting a selective set of entrepreneurs and special, market-leading companies to accelerate growth.”

Fund II benefited from a strong re-up rate of approximately 80%, with returning investors increasing commitments by 30%, relative to Fund I, while also adding a small number of new institutional investors, including leading funds-of-funds, insurance companies, corporate and public pensions, financial institutions, consultants, multi-family offices, endowments and foundations. In addition, more than 20 CEOs, founders, and industry executives invested in Fund II.

Over the past seven years, Blue Sea has invested in 45 differentiated and growth-oriented companies, including 11 platforms and 34 strategic add-on acquisitions, while expanding the Blue Sea team to 19 people, including 14 investment professionals.

“In a challenging year for the world, we are grateful for the hard work and positive outcomes driven by our portfolio company leadership teams,” said Managing Partner, Rick Wandoff. “Our success as a firm is a direct result of our entrepreneurs’ performance, including the ability for our Fund I companies to innovate and improve over the past year, coupled with a fast start for our Fund II portfolio companies.”

Fund II is already approximately 25% invested across three platform investments, including Apex Physics Partners, a leading diagnostic medical physics services platform; Innovative Labs, a leading developer, formulator, and provider of single serve and multi-dose ingestible health and wellness products for leading brands and direct sales companies; and Beacon Oral Specialists, a leading management services organization serving the oral surgery sector.

Lazard acted as the exclusive placement advisor to Fund II. Kirkland & Ellis LLP served as legal counsel.

About Blue Sea Capital
Blue Sea Capital is a private equity firm based in West Palm Beach, Florida that invests in growth-oriented lower middle market companies valued up to $250 million. The firm has over $750 million in assets under management and invests across three industry verticals: aerospace & defense, healthcare and industrial growth. Blue Sea Capital’s strategy is to partner with talented managers and differentiated companies, typically as the first or second institutional investor, and deliver strategic and operational value-add that drives growth acceleration and business transformation.