Atlantic Street closes third fund on $210m

The lower mid-market firm launched the fund earlier this year targeting $200m to invest in entrepreneur and family-owned business in five core sectors.

Lower mid-market firm Atlantic Street Capital (ASC) has closed its third flagship fund above target on $210 million, according to a statement from the firm.

The Stamford, Conn.-based firm launched Atlantic Street Capital III with a target of $200 million. An ASC spokesman said the fund held a first close late last winter.

The majority of commitments to the latest fund came from existing investors, with “a number of new” LPs, the firm said. The spokesman added that LPs in the latest fund were primarily institutional investors.

Investors in previous ASC funds include Morgan Stanley Alternative Investment Partners and insurer FM Global, according to PEI data.

A US Securities and Exchange Commission filing from January indicates that, at that time, there were 11 investors who committed a combined $102 million.

Fund III follows ASC's strategy of targeting lower mid-market companies with $4 million to $12 million in EBITDA in the consumer, transportation and specialty logistics, business services, software and IT, healthcare services and distribution, and manufacturing, aerospace and defense sectors.

ASC specifically focuses on entrepreneurial and family-owned businesses, and invests between $10 million and $30 million of equity per transaction to acquire equity stakes of greater than 50 percent, the statement said.

No investments have been made from Fund III, according to the spokesman.

This latest fund is more than double the size of Atlantic Street Capital II, which closed in 2012 on $65 million, short of its $80 million target, according to PEI data. The spokesman said the strategy won't change from Fund II to Fund III.

The fund close follows a slew of hires at the firm this year.George Parry and Kurt Lentz were named principals, Sarah Robson was appointed as a vice president of business development, Paul Sun as a senior associate, and Brendan Ross and Brantner Jones joined as associates. In total, there are 15 investment professionals at ASC.

The firm was founded in 2006 by Peter Shabecoff, who had previously been a partner at another Connecticut-based mid-market firm, North Castle Partners.

Its current portfolio includes sandwich chain Jimmy Johns, which it acquired in 2015, Uniguest, a self-service kiosks business serving the retail, consumer, healthcare, and senior home sectors, and ladies eveningwear provider Alex Apparel Group, according to its website.

The firm manages more than $250 million in assets and has made 28 investments.

Morrison Cohen served as legal counsel for the fundraise, according to the statement.