LongRange Capital is eyeing various carve-out opportunities as it moves to finish deployment of its 2020-vintage debut fund, according to Bob Berlin, the firm’s founder and managing partner.

He told Mergermarket that LongRange is seeing deal flow across consumer, industrials, technology and basic materials. Carve-outs feature prominently in the pipeline, with varying degrees of complexity.

“Each has its own customer base and operating requirements, and the key question is always whether the customer value proposition can be enhanced in a way that also makes economic sense for the business,” Berlin said.

Founded in 2019, the Stamford, Connecticut-based sponsor closed Fund I with USD 1.5bn in commitments a year later. The vehicle is now just over 60% deployed, including recycled distributions.

Customer value has always been central to LongRange’s strategy, exemplified by a playbook that emphasizes operational improvements that enhance value propositions and drive sales. “Ultimately, you need a top line before you can generate a bottom line, which is why we are focused on delivering value to our companies’ customers,” Berlin explained.

The firm’s most recent investment, Carlsbad, California-based gym chain 24 Hour Fitness, is indicative of this approach. Since acquiring the business from creditors earlier this year – working alongside founder Mark Mastrov – LongRange has concentrated on improving the customer experience. The company has over 235 locations across the US, according to its website.

It is ahead of schedule on planned upgrades to strength and cardio equipment and the expansion of services and wellness offerings. Berlin expects these efforts to drive increased retention rates and customer satisfaction scores. “We’re already well underway with additional remodels,” he added.

LongRange claims a willingness to engage with complexity, whether buying assets from creditors or carving them out from corporates. Carve-outs include the acquisition of ChampionX’s drilling technologies unit, US Synthetic, which closed last year, and the 2022 purchase of death care products and service provider Batesville from Hillenbrand.

Leverage is used conservatively, with portfolio-wide average leverage running below 3x EBITDA, which allows LongRange to support companies’ growth initiatives and leaves flexibility for distributions.

Typical portfolio companies generate between USD 50m to USD 200m in annual EBITDA, with the firm writing equity checks of up to USD 400m. Co-investment allows it to scale up when suitable opportunities arise.

LongRange has a partnership with California Public Employees’ Retirement System (CalPERS), which committed USD 1.5bn to Fund I, according to disclosures from the pension fund.

Fund I is structured to provide flexibility in deployment, with the ability to pursue larger equity investments exceeding USD 400m via a dedicated co-investment vehicle, which complements the strategy of pursuing substantial companies within the sponsors’ sub-sectors of focus. According to its website, LongRange has industry expertise in non-discretionary consumer, value-added industrials and data & information-based services, investing in both North America and Europe.

“We’re not a high‑velocity shop,” Berlin added. “If we find attractive, risk‑adjusted opportunities, we’ll invest. If we don’t, that’s fine too.”

In terms of exits, Greencore GBP 1.2bn (USD 1.6bn) acquisition of UK-based food manufacturer Bakkavor took out a 20.1% stake LongRange acquired from hedge fund Baupost in 2024. The sponsor received Greencore shares as part of the cash-and-stock deal, some of which were sold through a follow-on offering in February, one month after the deal closed.

According to Dealogic data, LongRange generated USD 115.66m through the follow-on, reducing its holding in Greencore from 8.75% pre-deal to 4.97%.

Berlin declined to comment on plans to exit the remaining shares, but he praised the convenience food group for its focus on delivering value to customers.

“Both Bakkavor historically, and now the combined business with Greencore, offer a highly compelling value proposition when you look at product quality, convenience, and affordability relative to alternatives like restaurants,” Berlin said.