Yucaipa Nearing Fundraise Target; Has a Motley Crew of Portfolio Companies

Yucaipa Companies, the investment firm run by supermarket magnate Ron Burkle, is in the market with its second “American Alliance Fund,” according to a regulatory filing.

To date, the fund has collected $1.52 billion in commitments. Meanwhile, a parallel fund called “American Alliance Parallel Fund II” has collected $462.5 million. Investors include New York City Employees’ Retirement System, Teachers’ Retirement System of the City of New York, and California Public Employees’ Retirement System. CalPERS committed $400 million.

Atlantic-Pacific Capital is the firm’s placement agent.

Yucaipa’s “American Alliance” funds are described as buyout and acquisition vehicles. The first iteration closed on $572 million in 2006. Prior to that, the firm closed a $200 million buyout fund called Yucaipa Corporate Initiatives LP in 2001. This vehicle promises to be much larger, with a target of $2.5 billion, according to the filing.

The fund has already made at least one investment, buying a 7% stake in Whole Foods for $98.6 million. That follows a PIPE in the natural and organic grocery store operator from Leonard Green & Partners, which took a 17% stake in the company last fall. It’s not unlike the firm’s prior PIPE into Pathmark, the national grocery chain.

Yucaipa is a firm that rarely gets attention for its investment activities. Its founder, Ron Burkle, is more of a celebrity for his billionaire bachelor antics and relationship with Bill Clinton (see: Bubba Trouble) than for his returns. For the record, the firm’s last fund, Yucaipa American Alliance Fund I, posted a 1.3x return on its money, according to CalPERS mid-year 2008 data.

Last year, Yucaipa lost saw one investment go down in flames when Aloha Airlines filed for bankruptcy. Yucaipa had purchased Aloha out of bankruptcy for $43 million in 2006 but couldn’t keep it out for long. Even an additional $163 million investment in the airline’s secured debt wasn’t enough. Aloha blamed its demise on unfair business practices of competing airline, Mesa Air. The company liquidated.

Performance Transportation Services, a car hauling services company which received an investment from Yucaipa in 2007, went bankrupt in June of last year.

Since the firm is rarely reported on and doesn’t have a lick of information on its website, I thought I’d list a few of Yucaipa Companies’ holdings, which follow a seemingly random strategy. (Maybe if they’d ever speak to the media, it would make sense to us!)

Stephen Webster (Investment year: 2007)
-Operates as a luxury jewelry designer and retailer. The Company is also universally known as the “jeweler to the stars.”
Garrard (Investment year: 2006)
-Designs jewelery and luxury gifts and accessories.

Grocery stores:
Whole Foods (Invested Jan. 09)
Pathmark (Invested 2005)

Barnes & Noble (Invested Jan. 2 2009)

TDS Group (Invested 2004)
-Provides automotive logistic services.
ALLIED SYSTEMS HOLDINGS INC (Invested undisclosed amount in 2007 and $20 million in 2008)
-Operates as a parent company of transportation services subsidiaries.

Current Media (Invested $75 million 2005, in registration to go public)
Operates as a peer-to-peer news and information network.