JW Childs co-founder retires amid solicitation charges

The co-founder of buyout shop JW Childs has retired a week after he was charged with solicitation of prostitution in Florida.

John Childs was one of 165 subjects charged following a six-month investigation into multiple massage parlours in Indian River county carried out by the Vero Beach Police Department Special Investigations Unit, the Sebastian Police Department Criminal Investigations Unit and the Indian River County Sheriff’s Office Vice Unit.

Childs, who owns a home in Vero Beach, is charged on a warrant issued by the Indian River County Sheriff’s Office dated 18 February with a $1,000 bond.

The firm announced on Monday that Childs, who was chairman, had stepped down from that role and his position as director of the board at portfolio company KeyImpact. His profile has been removed from the firm’s website.

It is understood Childs is not a key person on any of the firm’s active funds. He was no longer involved in the day-to-day running of the firm and had not worked full time at the firm for several years.

A source familiar with the situation told Private Equity International that the firm has had conversations related to the charging of Childs with its LPs, who have been “very supportive of the current management of the firm”, which includes managing partner Adam Suttin and partners David Fiorentino, Jeff Teschke and Bill Watts.

Childs co-founded Boston-based JW Childs Associates in 1995, which has since invested $3.7 billion of equity capital in businesses including Mattress Firm, Outward Hound and Honors Holdings, the leading franchisee and operator of Orangetheory Fitness studios, according to the firm’s website.

The firm is investing its fifth fund, a 2017-vintage that had a $500 million target, according to filings with the Securities and Exchange Commission.

The Canada Pension Plan Investment Board ran a restructuring process in 2014 on JW Childs’ third fund, which launched in 2002 and raised $1.75 billion. CPPIB invested $477 million to roll investments from the fund into a new vehicle called Winter Street Opportunities Fund and agreed to commit $119 million to the subsequent fund, as reported by PEI.

In total, 171 warrants have been issued and 45 have been served in the solicitation operation. At a press briefing on Thursday, Vero Beach police chief David Currey said authorities had received anonymous tips and complaints from citizens, and had launched the investigation which included undercover operations and electronic surveillance.

Currey said his message to those who have yet to be served warrants is: “Turn yourself in, or somebody’s going to be knocking at your door so you can go to jail.”

Childs has not been detained and has denied breaking the law, according to The Boston Globe.