Wynnchurch exceeds target

Wynnchurch Capital’s latest fund was roughly $250 million oversubscribed, holding its final close $50 million over its stated target.

Chicago-based Wynnchurch Capital finished raising its second fund, Wynnchurch Capital Partners II LP, coming in $50 million over its target for the $350 million (€296 million) vehicle. According to a press release, the firm had to turn away roughly $250 million for the oversubscribed fund.

The new vehicle more than doubles the group’s previous effort, a 2000-vintage, $163 million debut fund. Wynnchurch was originally founded in 1999 when  GE Capital veterans John Hatherly and John Tomes teamed with Canadian investor Richard Renault to launch the firm.

Wynnchurch has more capital with its new fund, but its strategy has not changed. The firm focuses on the middle market, specifically targeting companies in the niche manufacturing and business services sectors, and has a regional reach that stretches across the Midwestern US and Canada.

Wynnchurch’s investor base hints at this dual-country focus, as the fund has a heavy concentration of limited partners from both the US and Canada. Investors from the US include the likes of Goldman Sachs, Grove Street Advisors and The General Electric Pension Trust, while The Caisse de depot et placement du Quebec and Power Corporation of Canada represent the firm’s Canadian backing. The Local Government Pensions Institution (of Finland) and Nordea Investment Management were also listed as investors in the fund.

In a press release, Wynnchurch noted that since 2000 it has made 16 acquisitions and notched seven exits so far. One of the more notable realisations came from the firm’s recent sale of truck-parts manufacturer AxleTech International to The Carlyle Group, which reportedly yielded a return of more than 35x its original equity investment. The AxleTech deal helped prop the first fund’s IRR to more than 50 percent, according to reports.

Wynnchurch has suffered through two departures since its first vehicle was raised, including the exit of firm co-founder John Tomes, who moved on to help launch Hilco Equity Management in early 2002. Robert Vedra also left and is currently raising the debut fund of his new firm Industrial Opportunity Partners.

However, Wynnchurch has made a couple of additions, most recently adding former Questor Management managing director Terry Theodore to the team, and last year the group brought on board Crossroads Capital Partners vet Ian Kirson.

Bear Stearns & Co. served as placement agent for the Wynnchurch fund.