NEW YORK — LNK Partners, a new private equity firm focused on investing in the consumer-retail sector, closed on its first fund Tuesday, raising $400 million in committed capital.
The firm is led by David Landau and Henry Nasella, both formerly with private equity firm Apax Partners, and Bruce Klatsky, former chief executive officer of Phillips-Van Heusen who remains chairman. The fund was oversubscribed at its original target of $275 million.
“We decided to cap the fund at $400 million, which gives us tremendous flexibility to make small or large investments,” Landau said in an interview. “We also have limited partners who have a very significant appetite for coinvestment. We didn’t want the fund to be bigger because we didn’t want to feel pressure to limit ourselves to just big deals. Flexibility is very important to us.”
Landau said every ceo that he and Nasella backed when they were at Apax is investing in the new fund. LNK expects to invest in a wide range of investment types including growth capital, buyouts and recapitalizations, with investments between $20 million and $100 million per transaction. LNK can underwrite and lead larger investments. Co-investors would include existing investors in the fund. LNK does not plan to participate with or invest in deals with other private equity firms, according to Landau.
Ideal investments are companies that have clearly demonstrated their business model, where both the core economics of the business and the consumer value proposition are attractive and proven, Landau explained.
“The thing that we are really focused on, what differentiates us from a lot of folks, is that we’re really backing management teams. Many others buy a business based on their own plans for the companies. We back the management team and partner with them because we like their plans,” Landau said.
When Klatsky stepped down as ceo from PVH last year, he planned on a second career in the nonprofit sector. He spent the middle of June through the holidays working on a consultancy project for Human Rights Watch, where he is also a member of its board. Now he’ll spend more time at LNK helping to identify and nurture growing businesses. He also agreed to stand for reelection as chairman of PVH, in light of recent management changes, mostly to be available as an adviser to new ceo Emanuel Chirico, who succeeded Mark Weber.
“When David approached me about joining at some level, I really wanted to give something back. I thought this might be a fun experience helping younger people in newer businesses in the embryonic stage build something,” Klatsky said.
Klatsky emphasized that LNK Partners has “no intention of running a company,” but will advise companies as needed. He does foresee three issues facing companies down the road in the current business environment: global sourcing, a need for a focus on a specific channel of distribution and an understanding that brands that survive are those that are truly global brands.
For Klatsky, that means opportunities for investments are in those firms with management teams that understand the issues and who have brands that have the potential to be global brands.