Cap Z fund of funds head to quit

Capital Z Investment Partners, the New York-based “sponsorship investment” group backed by Switzerland’s Zurich Financial, will lose the head of its private equity fund of funds group and programme co-founder Scott Delman, who will leave his post in the middle of next year.

Capital Z Investment Partners backs what it calls “next generation” fund managers in the private equity and hedge fund asset classes and offers oversight and support to the franchises. Delman, an American, co-founded Capital Z in 1998. He previously was a director at Foreign & Colonial Emerging Markets in London.

In a statement, Delman said he was resigning to dedicate his time to “other pursuits”.

Laurence Cheng, the chairman and chief executive officer of Capital Z, said in the statement that Delman’s responsibilities would be taken up by himself and other Capital Z investment professionals.

Delman’s announced departure follows a string of departures from the firm since the summer, mostly of its marketing staff. Michael Ireland, who joined Capital Z over the summer from the private equity team of Florida’s state pension fund, left to join private investment boutique Auda Advisors; Heather Berger left to join the Credit Suisse First Boston placement agency; John Kim left to join the internal marketing team at Citigroup Private Equity; Callie Kourniotis left to join Alliance Capital; and Seleena Goel left to join AltInvest Partners.

In 2003, Capital Z had plans to raise as much as $700 million (€528 million) in third-party capital for a new private equity sponsorship fund of funds, supplementing the more than $2 billion in investment capital already made available by Zurich Financial. That effort has been placed on indefinite hold, according to several sources.

In the statement, Cheng said Capital Z Investment Partners “has over $300 million in uncommitted capital and will reserve a substantial portion of its unallocated capital for future commitments to the successor funds of its current sponsored managers. I have assured the employees of CZIP, the investors in CZIP and the managers that CZIP has sponsored and their investors, that I am dedicated to the future success of CZIP and all its investment strategies.”

A source said Cheng is telling his contacts that “Capital Z has more dry powder than it thought” due in part to recycled capital within the fund.

Capital Z also houses the Financial Services Partners group, which makes investments in the financial services industry.

Capital Z Investment Partners’ remaining private equity professionals include John Crocker, Vincent Fan and Harlan Zimmerman. The firm maintains additional offices in London and Hong Kong.