A New York private equity firm founded by JPMorgan and Guggenheim veterans is raising the largest-ever fund dedicated to the booming marijuana industry

Tuatara Capital

Tuatara Capital, a New York-based private equity fund, is raising $375 million for its second marijuana-focused fund, according to SEC filings.
If the firm hits its target, it will be one of the largest pools of capital dedicated to the booming cannabis industry.
Chief Investment Officer Al Foreman said in an interview Tuatara’s Fund II will rely on the firm’s long history operating in the nascent sector.

Tuatara Capital, a New York City-based private equity fund founded by Wall Street veterans, is raising what could be the largest pools of capital dedicated to the booming marijuana industry.

The firm is trying to raise as much as $375 million for its second marijuana-focused fund. It’s already raised $161.2 million of that as of February 1, according to a filing with the Securities and Exchange Commission.

The firm declined to comment on the specifics of its fundraising activity.

Tuatara was co-founded in 2014 by a trio of Wall Street veterans. The partners include chief investment officer Al Foreman who’s a former private equity banker and executive at JPMorgan, chairman Mark Zittman, formerly of Guggenheim Partners’ capital markets division, and chief operating officer Marc Riiska, who has worked at a number of venture capital and software firms.

Read more: Biotech, CBD drinks, and a hot vape company: Here’s where all the top marijuana VCs are looking to write checks this year

Foreman said in an interview that the new fund will rely on the “five years of institutional knowledge we’ve built up operating in the space.” (Five years, in a brand new industry like cannabis, is a long time).

The firm’s second fund will be a lot larger than its first. Tuatara raised $93 million for its first fund, which closed in 2016, and has backed eight portfolio companies — soon to be nine, according to Foreman — including marijuana brands like Willie’s Reserve, as well as biotech startups like Teewinot Life Sciences, which is developing patents for the production of cannabinoids for pharmaceutical applications.

Foreman believes that the cannabis industry will segment broadly into four distinct markets as it matures: “social consumption,” or recreational use, cannabinoid pharmaceuticals, cannabinoid health and wellness, and industrial hemp.

“That’s the thesis we laid out in 2014, and I would say that our belief in that thesis has been reaffirmed,” said Foreman. The firm has also not shied away from “plant-touching” investments despite the US federal government’s prohibition on marijuana.

Bullish on beverages

As the industry evolves, Foreman said Tuatara’s second fund will look to make investments into the infrastructure and enterprise technology startups that support the sector.

The firm also has a “keen eye” on some select international markets, says Foreman, particularly as more countries in Europe and South America introduce legislation to legalize marijuana either medically or recreationally.

“There are attributes of certain markets that are appealing to us, which I probably wouldn’t share because it’s our secret sauce,” said Foreman.

Read more: The top 12 venture-capital firms making deals in the booming cannabis industry that’s set to skyrocket to $75 billion

Another area …read more

Source:: Business Insider – Tech

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