Bridge’s Robert Morse discusses Newbury acquisition; plus deals for foodies

Good morning, Hubsters. MK Flynn here, welcoming you back to the work week after the long weekend.

If you’re feasting today for Mardi Gras – or Pancake Day, as it’s known in the UK – we’ll whet your appetite with a slew of food deals, including one announced this morning.

We’ve also got a Deep Dive into Bridge Investment Group’s recently announced $320 million acquisition of Newbury Partners, an investor in GP secondaries, featuring an interview with Bridge’s executive chairman.

And now some deals that’ll make you hungry.

ICV Partners announced earlier this morning that it has acquired the Desi Natural and Noga brands and related assets from AUA Private Equity Partners-backed Raymundo’s Food Group to form Desi Fresh Foods, a Farmingdale, New York-based producer of dahi, or South Asian yogurt, and lassi, a drinkable south Asian yogurt.

“ICV is excited to create a new company that is a leader in its category,” said Qian Elmore, a managing director at ICV. “Desi Fresh Foods growth has outpaced the growth of the South Asian population and appeals to the broadening American consumer’s palate. We think there is considerable opportunity to bring Desi Fresh Foods products to more grocers in America.”

Foodies. We’re seeing an uptick in dealmaking activity involving food, as PE firms add new flavors to their portfolios, reports PE Hub Europe’s Irien Joseph. Several food deals have been announced in the first two months of the year.

For example, earlier this month, Tasty Hut, backed by Triton Pacific Capital Partners, acquired a Pizza Hut restaurant in Monticello, Kentucky.

“The growth prospects of this acquisition are encouraging, and we expect it to be a key contributor to our broader portfolio and our overall value creation strategy,” said Craig Faggen, Triton Pacific CEO.

Tasty Hut now owns 221 Pizza Hut restaurants across 12 US states. In total, Triton Pacific’s affiliated restaurant management company, Tasty Restaurant Group, manages a portfolio of nearly 370 quick service on behalf of Triton Pacific sponsored funds.

Snack time. And in January, PE Hub’s Obey Martin Manayiti reported on half a dozen deals focused on snacks.

Henk Hartong, chairman and CEO of Brynwood Partners told Obey that there have been some fundamental changes in the way consumers are behaving as a result of the pandemic.

“We have seen a tremendous amount of growth in at-home consumption for breakfast, meal and snacking occasions,” Hartong said.

He noted that shifting economic trends could be fueling the trend whereby more Americans are preparing their meals at home. “At first people couldn’t eat out because of the pandemic, but then it has become a function of the economy, which has made it more difficult to afford out-of-home locations, and more people are eating meals and snacks at home.”

Brynwood portfolio company Hometown Food Company, based in Chicago, recently acquired Birch Benders from Sovos Brands. Hometown’s baking brands include Pillsbury Baking, Funfetti, Hungry Jack, Arrowhead Mills, White Lily, Jim Dandy, Martha White and De Wafelbakkers. Birch Benders makes baking mixes and frostings, as well as pancake and waffle mixes.

And now for something completely different…

Liquidity. Real estate secondaries transaction volumes have risen an average of 16 percent annually over the past five years, as our colleagues at Secondaries Investor have reported.

Capitalizing on the trend, Bridge Investment Group recently announced the $320 million acquisition of Newbury Partners, an investor in GP secondaries. The move is expected to tee off a new era of real estate secondaries, as well as other opportunities in the wider private equity market for both firms, Robert Morse, Bridge’s executive chairman, told Obey in an interview.

Bridge, founded in 2009 and headquartered in Salt Lake City, is a vertically integrated real estate investment manager with approximately $43.3 billion of assets under management.
Newbury, founded in 2006 and headquartered in Stamford, Connecticut, focuses on acquiring limited partnership interests in established buyout, growth equity and venture capital funds. It has raised over $6.2 billion of committed investor capital across five dedicated funds. The firm is planning to raise a sixth fund.

“We have taken a strategic approach to how we grow as we evolve,” said Morse, adding that the alternative asset management sector is growing at a double-digit rate, and secondaries provide a significant opportunity for liquidity to private equity investors. “We focus on the secondaries business as an even more rapidly growing area of private equity than the underlying market itself.”

Even though Bridge will continue to offer several real estate-oriented vehicles to its investors, offering a secondaries exposure to its investor base, together with the existing Newbury investor base, will be a positive addition to the business, said Morse. He said there is a great deal of growth in the secondaries market related to real estate investments.

“We think there’s opportunities to expand into real estate secondaries and other areas of the secondaries business that Newbury currently does not participate in as well,” he said.
What adds to the attractiveness of the deal, especially when operating in a tight fundraising environment, is that for investors in closed-end funds where there are limited liquidity alternatives, secondaries have emerged as one of the most promising options.

As liquidity needs grow in times of dislocations, Morse said the combination of Bridge and Newbury will offer solutions to alternative asset investors who might have a change of plans, or whose capital is diminishing or need liquidity for whatever reasons. “The fact that there is a decrease in fundraising today should amplify the opportunities available for secondaries market participants.”

That does it for today.

Tomorrow, Buyouts’ Chris Witkowsky will write the Wire, and I’ll be back on Thursday.

Cheers,

MK