L Catterton makes first investment out of new fund

Singapore’s sovereign wealth fund GIC also co-invested alongside L Catterton in pool and spa retailer Leslie’s Holdings, which CVC originally bought in 2010.

Consumer sector-focused L Catterton and Singapore’s sovereign wealth fund GIC are acquiring swimming pool and spa retailer Leslie’s Holdings from CVC Capital Partners in a co-investment.

This is L Catterton’s first investment out of its latest flagship fund, L Catterton VIII, which closed in November on $2.75 billion, above its $2.5 billion initial hard-cap, according to a joint statement from L Catterton and GIC released on Wednesday.

A source familiar with the matter told Private Equity International the previous fund, Catterton Partners VII, is fully invested. According to PEI data, the seventh fund closed on $1.68 billion, beating its $1.2 billion target, in September 2013.

The source added that this is not the first time GIC co-invested with L Catterton.

Investors in Fund VIII include Pennsylvania Public School Employees’ Retirement System, LVMH Moët Hennessy Louis Vuitton, Missouri Local Government Employees’ Retirement System and SVG Capital, according to PEI data.

Leslie’s is a retailer and online marketer of pool and spa supplies and services, with more than 890 stores across 35 US states, according to the statement.

The financial details of the transaction were undisclosed, and it was unclear how much L Catterton and GIC each contributed to the co-investment in the Phoenix-based company.

London-based CVC originally invested in Leslie’s in September 2010 through CVC European Equity Partners V and CVC Tandem Fund. According to PEI data, CVC’s fifth European-focused fund closed in 2009 on €10.75 billion, short of its €12.10 billion target.

Its investor base includes the British Columbia Investment Management Corporation, California Public Employees’ Retirement System (CalPERS), Florida State Board of Administration and Oregon State Treasury, PEI data indicated.

The Tandem Fund, which raised €4.12 billion in 2007, is meant for co-investments and had a target of €4 billion, according to media reports.

A separate statement from CVC on Wednesday indicated that, under CVC’s ownership, Leslie’s grew its number of stores from 645 to more than the aforementioned 890, and made six add-on acquisitions.

A CVC spokeswoman declined to comment on the amount of CVC’s original investment in Leslie’s, the return-on-investment metrics via this exit, or current fundraising plans.

She added that there are 13 active investments remaining in Fund V, including Leslie’s, and the fund was generating a 24 percent gross internal rate of return as of September. The CalPERS Private Equity Program Fund Performance Review tool showed that Fund V was generating a net IRR of 12.6 percent as of 30 June.

According to CVC’s website, Fund V’s current portfolio includes insurance claims services provider Cunningham Lindsey, plumbing and electrical tool provider Ahlsell and Scandinavian optical retail chain Synsam.

CVC manages about $50 billion in assets, according to its spokeswoman, while GIC manages over $100 billion in assets, according to Wednesday’s statement. L Catterton manages about $14 billion in assets, according to its website.

L Catterton declined to comment, while GIC and Leslie’s were not available to comment.