Arbor Investments raises its biggest fund


Oct. 14, 2020

Chicago private-equity firm Arbor Investments, which specializes in food and beverage acquisitions, has raised its biggest fund, attracting $1.5 billion and doubling its assets under management.

The company said in a statement today that it wrapped up this fifth investment fund, alongside the closing of a new $168 million debt fund, its second.

Arbor CEO Greg Purcell plans to maintain the firm's current investment strategy, buying companies with revenue of between $100 million and $600 million though it may skew higher now. He still expects to have a portfolio that favors 60 percent companies selling food to restaurants, with 40 percent selling to grocery stores, even though the former have been harder hit than the latter in the COVID-19 era.

“People are staying home and they’re eating and cooking at home," Purcell said in an interview, but he expects people to start returning to restaurants soon. “People are dying to live again," he said. "We’re long-term bullish on the restaurant industry.”

For its fourth fund, Arbor raised $765 million in 2016, when it also raised its inaugural debt fund with $125 million. It now has $2.9 billion in assets under management.

Private-equity firms raise money from institutional investors such as pensions, endowments and foundations, and then use the funds to buy companies with the aim of increasing profits before selling them at a gain. As part of that process, they also seek to streamline costs, especially with additional mergers, including sometimes by cutting employees. Investments are made and exited typically within a 10-year fund cycle.

Some of the companies that Arbor has acquired and currently owns include Bartlett, Ill.-based Greco & Sons; Brockton, Mass.-based Concord Foods; and Nashville, Tenn.-based Bakery Cos.

"Contrary to typical private equity firms, Arbor has always been focused on adding value beyond just capital and our results reflect this unconventional approach," Timothy Fallon, senior operating partner at Arbor, said in the statement. "We're firm believers in the advantages of industry specialization.”

The firm was founded in 1999 and is run by Purcell, Fallon and President Carl Allegretti. Vice Chairman Joseph Campolo retains his post, but has retired.

Chicago Business: Arbor Investments Raises its Biggest Fund