Compliance expert turned GP launches fund

Hanh Nguyen, a former compliance consultant at ACA Compliance Group, launched her own private equity firm: Yossarian Capital Partners (YCP).

Interestingly, Nguyen intends to use general solicitation, a mass marketing strategy unproven to date, and a tactic GPs feel nervous about until further regulatory certainty is offered by rulemakers, to market the fund to investors. The fund will only accept a minimum investment of $2 million.

The firm aims to redevelop small distressed communities across the US. Nguyen, managing partner and founder at the firm, is also chief compliance officer. The firm’s first offering, the Greater Yuma Fund, is targeting a $150 million to invest in the Yuma region of Arizona. The fund’s goal is to drive economic growth and development through investments targeting education, quality of life and business growth. The fund will be led by an Investment Committee including Nguyen and four local residents: Chris Wheeler, Jerry LoCoco, Jim Davey, and Kevin Wilkins.

The US Securities and Exchange Commission (SEC) lifted the ban on general solicitation in 2013 with Rule 506(c) of the JOBS Act, but few GPs have taken advantage of the reforms, citing ongoing regulatory uncertainty. Although general solicitation may seem like a “daunting venture,” it’s “actually quite simple,” Nguyen noted in a call with pfm.

The firm plans to use third parties such as CPAs or law firms to verify that YCP’s investors are accredited. If successful, it’s possible that other GPs will take her lead, comfortable knowing that a former compliance professional has trailblazed a path to more investors.

Another focus at YCP will be transparency, Nguyen noted, a contrast to the “pushback” she used to receive from private equity managers when she asked them to increase disclosures during her time at ACA. The firm plans to roll out a website that will make fund information as accessible to the general public as it is to LPs because “when you’re acting correctly, there’s nothing to hide,” Nguyen said.

“The real value I see to Rule 506(c) is the ability for YCP to pull back the kimono and openly share with the general public these special communities we enter and the great things we hope to accomplish there through our private funds,” Nguyen said in a statement. “I am thrilled to be able to offer a level of transparency that the private fund industry has not been able to before and start demystifying and educating people on the possibilities of what can be accomplished when private equity meets social consciousness.“