Houlihan Lokey gets into fund placement business with BearTooth acquisition

The investment bank is adding capital-raising services for private funds to its product platform for the first time.

Houlihan Lokey has acquired BearTooth Advisors in a deal that closed Monday, marking the Los Angeles-based investment bank’s first foray into the placement agent business.

BearTooth, a firm that specialises in helping general partners raise an array of alternative asset funds, including private equity and private credit, has become part of Houlihan Lokey’s corporate finance division, forming the firm’s private funds group. No financial terms of the transaction were disclosed.

Houlihan Lokey had been looking at adding a placement agent business of its own for many years, firm co-president and corporate finance co-head Scott Adelson said. The firm contemplated both acquiring an existing firm or making a key hire, and while the investment bank saw multiple opportunities in the past, it held out for right moment.

“We are huge believers in the alternative asset class overall, and the growth we’ve seen in it over the years has not disappointed,” Adelson said.

Along with BearTooth’s three senior executives, 14 other employees came over to form the core PFG team, encompassing both fundraising professionals and back office staff.

The team currently operates out of London and New York, but Adelson expects to expand both PFG’s personnel and geographic footprint, Adelson said. Initial possibilities for expansion include anywhere the larger Houlihan Lokey firm has offices, which are situated in 23 cities in the US, Europe, the Middle East and the Asia-Pacific region.

Bob Brown, Andy Lund and Jim McGee and Riverstone Holdings, a Houston-based energy-focused private equity firm, formed BearTooth in 2014. Alongside private equity and private credit vehicles, the firm has raised real estate, energy and natural resource funds.

Brown was named among the industry’s best fundraisers by his peers in April in Private Equity International‘s Rainmaker 50 list.

Specific mandates include the $5.08 billion Riverstone Global Energy and Power Fund VI, the $545 million Riverstone Credit Partners vehicle, EQT’s $800 million Mid-Market Asia III buyout fund and Revelstoke Capital Partners’ $307 million Revelstoke Capital Partners US-focused buyout fund.

“BearTooth is culturally a great fit and has an incredible track record,” Adelson said. That culture, Adelson added, is “first and foremost, a dedication to achieving great outcomes for our clients” and “number two, ensuring a collaborative partnership” among its employees.