LVMH Moet Hennessy Louis Vuitton SE, the French luxury goods maker, is combining its private equity group, known as L Capital, and its real estate investment unit with consumer-focused private equity firm Catterton.
The combined company, to be called L Catterton, will be 60 percent owned by the partners of the new firm with the remainder held by LVMH and Groupe Arnault, the family holding company of LVMH Chairman and Chief Executive Officer Bernard Arnault, according to a statement from the companies.
“L Catterton will provide investors with a unique value creation platform, bringing together our global network and industry expertise” Arnault said in the statement. “Having been investors in Catterton’s funds since 1998, we have participated in its growth and success, evidenced by its strong track record and its distinctive culture.”
The new company, which expects to have about $12 billion in assets under management after the completion of ongoing fund raisings, will be led by Michael Chu and Scott A. Dahnke, managing partners at Catterton. Daniel Piette, managing partner of L Capital, will move to another role at LVMH, Arnault said in the statement. L Catterton will be based in Greenwich, Connecticut and London, with regional offices across Europe, Asia and Latin America.
L Capital, based in Paris, was founded in 2001, with a separate Asian platform created in 2009. The company, which makes investments of between 15 million euros ($16.1 million) and 60 million euros, has taken stakes in companies including Pepe Jeans and Italian restaurant group Cigierre, according to its website.
Mergers between private equity firms are rare, with founders typically favoring shuttering their operations over selling. The proposed merger between Ares Management LP and Kayne Anderson Capital Advisors was canceled last year following strategy disagreements over how to respond to falling oil prices.
Catterton, based in Greenwich, was founded in 1989 and has about $5.5 billion in assets under management. The company recently made a $75 million investment in indoor cycling fitness company Peloton Interactive Inc., and also holds stakes in fitness outfitter Sweaty Betty, retailer Build-A-Bear Workshop and P.F. Chang’s Chinese restaurants.