- Third fund since switch from subordinated debt to control equity
- Will target advanced manufacturing, specialty distribution, business services
- Investment strategy stresses capital preservation
Windjammer Capital Investors is targeting $800 million for its fifth institutional fund, according to pension documents.
Windjammer Senior Equity Fund V will pursue control buyouts in middle-market businesses, including advanced manufacturing, specialty distribution and business services companies. The firm expects to invest in eight to 12 platform companies, as well as add-on acquisitions.
This will be Windjammer’s third fund since it shifted its investment focus from subordinated debt to control equity in 2006. Like previous senior equity vehicles, Fund V will be able “in certain limited situations to provide subordinated debt to platform companies,” the Minnesota State Board of Investment documents say.
The GP is expected to invest an amount equal to at least 2 percent of total LP commitments. Management fees are set at 2 percent of committed capital during the investment period and 2 percent of invested capital after that.
Founded in 1990, Windjammer is led by Managing Principals Costa Littas, Gregory Bondick and Jeffrey Miehe, who were the lead deal-team members on most of the firm’s control equity deals over the past decade.
Bondick and Miehe will join Littas on the management committee of Fund V as part of a succession plan; Robert Bartholomew, a co-founder who oversaw the firm’s initial subordinated debt strategy, will not serve on the fund’s investment or management committee.
The departures of any two of Littas, Bondick and Miehe would trigger key-person provisions.
The firm’s previous vehicle has a net IRR of minus 0.2 percent and a net MOIC of 1x as of June 30, pension documents said, citing State Street. The fund closed in 2012 with $726 million. Fund III, a 2006 vintage, has a 19.2 percent net IRR and 2.3x net MOIC.
Windjammer has offices in Newport Beach, California, and Waltham, Massachusetts.
Action Item: Check out Windjammer’s Form ADV here.
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