Kainos Capital has held a final closing of Kainos Capital Partners III LP with just over $1 billion in capital commitments.
Fund III is the largest fund ever raised by Kainos, and existing limited partners provided a significant amount of Fund III’s capital and referred many new investors. The close of Fund III follows the $895 million hard cap close of Kainos Capital Partners II LP in November 2016.
Dallas-headquartered Kainos invests in family-owned businesses and corporate carve-outs in the food and consumer products sectors that have from $10 million to $80 million in EBITDA. According to Kainos, these types of sellers – several of whom are limited partners in Fund III – frequently value Kainos’ sector experience and operating capabilities, often retaining ownership stakes in the businesses Kainos acquires. Fund III can commit over $300 million of equity in any single transaction and more through its limited partner co-investment program.
Kainos was founded in January 2012 by its managing partner, Andrew Rosen. Before founding Kainos, Mr. Rosen was with Hicks, Muse, Tate and Furst, where he helped establish and lead its United States food and consumer products group.
Today, many of the partners at Kainos have been investing in the food and consumer industry for over 20 years, and several were senior leaders before joining Kainos. Kainos’ investment team works with its operations team to drive portfolio company value through manufacturing process improvement, supply chain and purchasing savings, financial organization and analysis, information technology enhancements, and talent recruitment and retention.
“Our bench of seasoned investors and operators within the food and consumer sectors helps drive financial and operational performance by working hand-in-glove with management teams. We believe Kainos’ sector experience, industry relationships, and robust operating capabilities make us an attractive partner to families and entrepreneurs who are excited about their business prospects yet seek to diversify their wealth,” said Mr. Rosen. “We are grateful for the strong support we received from our investors, whose continued partnership is a testament to the strength of our team and our Change Capital investment approach.”
Fund III is already 33% invested in three portfolio companies, including CellCore Biosciences, an Idaho-based wellness company that provides dietary supplements that are primarily sold through the practitioner channel (April 2022); Specialty Sales, a California-based specialty distributor of animal health, welfare, and technology products serving the dairy cow sector (acquired from Benford Capital in October 2022); Evriholder Products, a California-based designer, developer, and distributor of household, kitchen and personal care products (acquired from Edgewater Funds and JZ Partners in January 2023).
Kainos’ second fund is still invested in Wellful, a Philadelphia and Charlotte-headquartered direct-to-consumer seller of health and wellness products, including the Nutrisystem and Nugenix brands (2020); Whisps, a New York-based maker of cheese crisps (2019); Muenster Milling, a Texas-based manufacturer of freeze-dried and extruded pet food and ingredients (2021); and BeautyBio, a Texas-based skincare and beauty brand (2019).
Since its founding in 2012, Kainos has now invested approximately $3 billion of equity in more than 40 transactions with a total transaction value of over $6 billion.
© 2023 Private Equity Professional | February 14, 2023
