Arbor raises $765m for fourth fund

The buyout firm, which invests in food and beverage companies, has also closed on its first debt vehicle, which will provide a source of subordinated debt for its fourth fund.

Arbor Investments has closed its fourth fund, Arbor Investments IV, on $765 million, above its $725 million target, the firm said earlier this month.

Texas County and District Retirement System committed $50 million to the fund, according to PEI Research and Analytics.  

“We are extremely gratified by the level of support we received from our existing investors and the overwhelming level of interest from new investors, which allowed us to complete our fundraising within 90 days,” Gregory Purcell, co-founder and chief executive officer of Arbor Investments, said in a statement announcing the final close. 

Arbor Investments declined to comment beyond the statement. 

Fund IV will continue the same investment strategy employed by the firm for its predecessor funds. The strategy consists of making private equity investments in reasonably valued, high-quality mid-market food and beverage companies that exhibit the potential for substantial capital appreciation through improved financial performance and enhanced strategic positioning, according to the statement. 

The firm also closed on-target their first debt vehicle Arbor Debt Opportunities Fund I (DOF I) on $125 million. The debt vehicle was raised to provide a source of subordinated debt to Fund IV portfolio companies, according to the statement. 

The firm believes that DOF I will substantially enhance Fund IV's ability to structure and execute platform investments, while preserving equity upside and providing a new investment vehicle for investors to obtain an attractive risk-adjusted investment return, according to the statement. 

Fund IV's predecessor, Arbor Investments III, closed on $400 million in 2013, above its $300 million target. Investors include Copenhagen-based ATP Private Equity Partners, which committed €65 million, as well as Illinois Municipal Retirement Fund, Pantheon Ventures and SL Capital Partners, among others. 

The firm currently has 13 portfolio companies, including beverage company Artisanal Brewing Ventures, which the firm purchased in 2016, ingredients and seasoning company Concord Foods, which the firm helped recapitalise in June 2015, and baking company PBF Pita Bread Factory, which the firm helped recapitalise in 2013. 

Fund II is a $170 million vehicle from 2011. The fund, which is now fully invested, previously sold portfolio company Arbor Mid-Atlantic Bottling Company Inc. to the Coca-Cola Company in 2014 for an undisclosed amount.

Chicago-based Arbor Investments was founded in 1999 by Purcell and firm president Joseph Campolo. The firm has $541.4 million in assets under management, according to PEI Research and Analytics. Arbor has acquired or invested in more than 44 food, beverage and related companies in North America, as of July, according to the statement.