Golden Gate closes second fund on $1.8bn

The San Francisco-based firm, founded by former Bain Capital managing directors, will continue to focus its newest fund on multi-sector, ‘change-intensive’ businesses.

San Francisco-based middle market firm Golden Gate Capital, founded by former managing directors of Boston buyout giant Bain Capital, has raised $1.8 billion (€1.49 billion) for its second private equity fund.

The newest fund is more than double its $700 million predecessor, and brings the firm’s total capital under management to approximately $2.5 billion. Fund I made 19 investments and is fully committed; fund II has already made two acquisitions.

In the press statement, Golden Gate said that its investors primarily came from its first fund and include college endowments, foundations, wealthy individuals and select funds-of-funds. A small number of new investors were added.

Golden Gate, started in 2000 by former Bain professionals David Dominik and Jesse Rogers, will continue its strategy of investing in growth businesses in various sectors, including software, electronics, manufacturing, media and medical devices.

In April, Golden Gate teamed with Greenwich, Connecticut-based North Castle Partners in a $650 million recapitalisation of Leiner Health Products. As part of the recap, Golden Gate and a new 'fund investment vehicle' managed by North Castle will co-sponsor an investment of approximately $265 million (€224 million) into Leiner, which manufactures store-brand vitamins, nutritional supplements and over-the-counter drugs.

In March, Golden Gate participated in the $250 million series B financing for specialty pharmaceutical company Jazz Pharmaceuticals, which is one of the largest second-round fundings on records for a niche drug company without any commercialized products.