Garnett Station builds regional restaurant brand platform; LPs push back on NAV loan distributions

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Editor's note: A reminder that we won't be publishing PE Hub Wire tomorrow as we'll be off for the Thanksgiving holiday. On Friday, PE Hub Europe Editor Craig McGlashan will be writing an abbreviated version.

Garnett Station builds regional restaurant brand platform; LPs push back on NAV loan distributions

Morning Hubs!
This is Chris, on for Wire Wednesday.
Today we have news that Garnett Station Partners added-on Fiesta Restaurant Group to its Authentic Restaurant Brands.
We also discuss the growing awareness and, in some cases, concern among LPs about use of fund financing strategies as a way to deliver distributions.
Fortress foods

As we here in the US get ready to feast on turkey, stuffing and other starch-heavy dishes, we’ll leave you with some food-laden M&A.
Garnett Station Partners, formed in 2013, is building out a branded restaurant platform, developing regional chains taking bigger chunks of market share. The firm’s platform, launched in 2021 and called Authentic Restaurant Brands, in October added-on Fiesta Restaurant Group for $225 million. Fiesta is the parent company of Miami’s Pollo Tropical restaurant chain. Read more here on PE Hub.
Debt

As liquidity from PE portfolios has dried up, GPs are considering various options for ways to deliver proceeds to existing LPs (not to mention for future M&A activity or even for emergency support for challenged port cos). But many LPs I’ve spoken to recently are not fans of a GP taking on fund-level leverage as a way to distribute to LPs. Taking on additional debt to bulk up a DPI rate, in most cases just to make that metric more attractive to potential LPs in a future fundraising, is not looked on favorably by many LPs. Subscribers can read more in the premium version of The Wire.
That’s it for me! Finish off the week strong and have a great holiday (if you’re celebrating). Hit me up as always at [email protected] with tips n’ gossip, feedback or The Drama (and I know there’s a good amount going on out there). Or find me on LinkedIn.

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