Buyouts South: Sun Capital on its Fund Size Reduction

Earlier this year, Sun Capital became one of a small handful of buyout funds that agreed to reduce its fund size. The firm allowed LPs to decrease their commitments to its $6 billion fifth fund, slicing off $1 billion. That news was welcome to investors and a breath of fresh air to those that felt the firm was deaf to their concerns.

At the Buyouts South conference in Boca Raton this week, Sun Capital Senior Managing Director Steven Liff commented on the move:

“It was a voluntary decision. We heard the angst of our LPs, we listened to our partners, and we know they are our lifeblood. Any firm arrogant enough not to realize that, is going to have a short-lived run of it. We felt the pain of some of our LPs who were over-allocated. We are currently comfortable with the amount of money we have,” he said.

What percentage of LPs took you up on it?

“It was the overwhelming majority. There were some smaller guys and individuals who decided against it. It shows we have confidence in our LPs that when we need to raise another fund down the line, they will be there,” he said.