GE Capital Exec Markets Debut Hybrid Vehicle –

The former head of GE Capital’s merchant banking unit, John Hatherly, this month began readying his own $250 million buyout fund with the support of Bain Capital.

Mr. Hatherly has formed Wynnchurch Capital Ltd. to launch Wynnchurch Capital Partners, L.P. with Partner Jon Tomes, the former director of GE Capital’s merchant banking group on the West Coast, and Partner Richard Renault, a Canadian investor who has a history of investing in underperforming companies.

The partners now are meeting with placement agents and soon will come to market with a vehicle that will pursue the same types of investments Mr. Hatherly made at GE Capital, Mr. Tomes said.

Chicago-based Wynnchurch will look to invest in manufacturing and consumer product companies in the Midwest and Canada. The firm also has a particular interest in later-stage information technology companies, Mr. Tomes said. The strategy will include growing companies more than building platforms, he added.

At GE Capital, Mr. Hatherly led a 50-person team that made senior loans, mezzanine tranches and direct investments in companies. The group committed an average of between $5 million and $20 million in equity stakes per deal under Mr. Hatherly’s watch. Partners at GE Capital could not be reached for comment.

Mr. Hatherly ran the unit from 1995 until February and had been at GE since 1987. Mr. Tomes led the West Coast office from 1996 to 1998, Mr. Tomes said.

Although GE Capital acts as a buyout firm in that it sources its own deals and exits its equity investments in approximately five years, sources said some of its deal flow likely comes from the fact that it also loaned capital to companies.

“We generated very attractive returns for GE and built a great franchise and we thought we should have a hand in our own firm,” Mr. Tomes said.

During Mr. Hatherly’s tenure, GE Capital occasionally shopped deals to Bain Capital. Partners at Bain now sit on Wynnchurch’s advisory board and may pass deals that Bain cannot pursue to the new firm.