Soundcore bets on buy-and-build with debut fund

The vehicle closed on its $350m hard-cap and has a 5% GP commitment.

Soundcore Capital Partners has held a final close on its debut institutional fund hitting its $350 million hard-cap.

Soundcore Capital Partners Fund II, which formally launched at the end of last summer and held an official first close on around $160 million in the spring, had an initial target of $300 million and was oversubscribed.

The final amount includes a GP commitment of 5 percent, according to a source with knowledge of the matter.

Soundcore declined to comment beyond a press release announcing the fund close.

UBS private funds group served as placement agent for the raise and Kirkland & Ellis served as legal counsel to the firm.

The fund will look to make eight platform investments, writing average equity cheques of $45 million, in three target market segments: business services; speciality distribution; and valued-added manufacturing.

Soundcore’s name is derived from its focus on “sound investments” and “core principles”, according to the press release. The firm, founded in 2015 by managing partners Jarrett Turner and Feliks Zarotsky, who met at Sun Capital Partners, has already made three investments on a deal-by-deal basis.

In 2015, the firm invested in Alloy Wheel Repair Specialists, to which it subsequently bolted on 14 add-on acquisitions. This was followed by commercial pump repair and distribution business Pump Man in 2016 and street sweeping and pavement maintenance company Sweeping Corporation of America, which have since made six and seven add-on acquisitions, respectively.

Soundcore aims to make a 4x return in four years on each portfolio company, the source told Private Equity International.

The fund’s LP base includes most of the investors who joined Soundcore on its pre-fund investments. It comprises endowments, single and multi-family offices, foundations, a public pension fund, funds of funds and high-net-worth individuals.

The firm is seeking to make its first investment from Fund II this summer.

Add-on acquisitions accounted for 70 percent of all buyout activity in the US in the first quarter of this year and have been steadily above 60 percent since 2013, according to data from Pitchbook.