Branford Leverages Top Quartile Performance, Closes Second Fund

Branford Castle Partners has closed its second fund with just over $205 million in capital commitments.

Branford Castle invests in companies that have enterprise values of up to $100 million and EBITDA of less than $15 million. Sectors of interest include consumer products and services, commercial distribution, industrials and specialty manufacturing, business services, and logistics.

From 1986 to 2016, Branford Castle operated as a family office that was founded by John K. Castle who also founded New York City-based private equity firm Castle Harlan. In October 2016, the firm held a final close of its $117 million first fund, the first fund that the family office had ever made available to outside investors.

According to John S. Castle, the president and CEO of Branford, Fund I generated a 47.1% gross IRR and a 26.3% net IRR. Financial data provider Preqin reports that for a 2016 vintage fund with under $500 million of capital, IRRs above 14.3% qualify as top quartile.

“We appreciate all of our investors that have joined us,” said Mr. Castle. “Moreover, we look forward to continuing our strategy of making control investments in niche market-leading businesses with under $100 million in transaction value. We think that our differentiated investment strategy, our approach to sourcing and our experienced team are key contributors to the success of Fund I, and we expect all of these factors to serve us well in Fund II.”

In April 2021, Branford’s second fund acquired Lafayette Instrument, an Indiana-based maker of polygraph equipment and other scientific instruments including heart rate monitors, headsets, arm cuffs, electrodes, and activity sensors. According to Lafayette, it has sold more polygraph and credibility assessment instruments to private examiners, government, and military organizations than any other manufacturer in the world. Lafayette also provides neuroscience products – mouse and rat activity systems and mazes, test and sleep deprivation chambers, and touch measurement systems – to both public and private research laboratories.

Earlier, in August 2020, Branford’s second fund acquired its first portfolio company with the buy of Fibrix Filtration, a North Carolina-based manufacturer of filtration fabrics used in industrial air and commercial HVAC filters.

“Fund II is off to a strong start with the acquisitions of Fibrix Filtration and Lafayette Instrument,” said Laurence Lederer, a senior managing director at Branford. “We have begun working with management of these businesses to accelerate their growth trajectories and are excited by the early results.”

Branford Castle is headquartered in New York City.

Private Equity Professional | May 27, 2021