Jacobson Partners Shelves Fundraising Effort

Jacobson Partners, a New York-based turnaround shop, has indefinitely shelved plans to raise its fifth fund, a source with knowledge of the firm’s plans said.

Executives at the firm decided to forego the effort because of the difficult fundraising environment, our source said; the source declined to say if the firm had already raised a certain amount. There is no target date to resuscitate the effort, our source said.

Officials at the firm declined to comment for this article.

Jacobson Partners was planning a target of $250 million for the fifth fund, according to a report in the May 12, 2008 edition of Buyouts. Executives at the firm had hoped to close the fund, JP Acquisition Fund V LP, by the end of 2008.

The shop raised around $125 million for its previous fund, though that’s an inexact figure because Jacobson Partners allows investors to commit more capital over the course of the fund’s deployment.

Benjamin Jacobson, a managing general partner who started his career as an investment banker at Paine Webber Inc. in 1969, founded the firm in 1989. His staff includes four investment professionals and three operating partners.

Jacobson Partners has kept a relatively low-key profile over the years. It gained attention in 2005 when it turned around Taco Bueno, a Texas-based fast food chain. Jacobson Partners extracted three debt recapitalizations from Taco Bueno before selling it to Palladium Equity Partners for a 9.6x return on its invested capital; the investment came from the firm’s third fund.

Jacobson Partners targets underperforming companies and non-core divisions of large corporations with enterprise values of $25 million to $150 million. It looks to invest between $10 million and $25 million of equity in its deals, according to its Web site. Jacobson Partners prefers to buy assets in liquidation rather than stock in bankrupt companies, ensuring tax efficiency and a lack of liabilities.

Among the firm’s current holdings are Bertucci’s, an 89-store brick oven pizza chain it bought in 1998, and Flexible Packaging Corp., a Canadian food and pharmaceutical packaging company acquired in 1993.