Goldman was backer in Hutton Collins directs deal – exclusive

Goldman Sachs Asset Management has emerged as the backer of a deal in which Hutton Collins sold half the portfolio of its 2009-vintage fund to a firm founded by one of its former executives.

London-headquartered Hutton Collins had closed a deal in January to sell half its stake in restaurant chain Byron Hamburgers to Three Hills Capital Partners – a private equity and private credit firm founded in 2013 by ex-Hutton Collins partner Mauro Moretti. According to an announcement from Byron on 9 January, existing investor Three Hills would become majority shareholder, with Hutton Collins retaining a significant minority interest.

Secondaries Investor has since learned that the deal involved more than the stake in Byron. According to four sources familiar with the matter, Hutton Collins offloaded half the assets from its €600 million Hutton Collins Capital Partners Fund III – which also included a stake in pan-Asian restaurant chain Wagamama – to a vehicle managed by Three Hills.

Goldman bought into the transaction and provided follow-on capital, according to three of the sources. It is understood the investment bank paid around €100 million into the deal.

Advisory firm and placement agent Rede Partners advised on the transaction, according to the sources. Rede is also helping Three Hills raise its third fund, according to two of the sources. The name, target and strategy of that fund is unclear.

Goldman’s acquisition of half of Fund III increases its exposure to Wagamana after the investment bank teamed up with Arcano Asset Management in 2016 to restructure UK buyout firm Duke Street’s 2006-vintage fund. In that deal, the vehicle’s six assets, including Wagamama, were moved into a special purpose vehicle with Goldman and Arcano acquiring as much as €130 million of net asset value.

On 9 January, accountancy firm KPMG announced that Byron had carried out a strategic review of its operations spurred by the under-performance of certain parts of its portfolio and the “gathering economic headwinds” facing the casual dining sector.

The result was a company voluntary arrangement, “a financial restructuring with the company’s lenders and shareholders, which will enable new investment to come into the business”.

Investors in Hutton Collins Fund III include New York State teachers’ Retirement System, Pantheon Ventures and Denmark’s PFA Pension, according to PEI data.

Three Hills manages two funds with around €400 million in assets and has at least two other former Hutton Collins professionals on its team, according to its website. The firm listed Graham Hutton, Hutton Collins’ co-founder, as a senior advisor in a 2016 statement announcing management changes at Byron. It is unclear whether Hutton is still an advisor to Three Hills and neither Hutton Collins nor Three Hills returned requests for comment.

Goldman and Rede declined to comment.