Private Equity News & Analysis

Lazard buys Chicago private equity firm The Edgewater Funds

Lazard acquired the 18-year-old private equity firm for an undisclosed amount. The Bruce Wasserstein-led firm has been slowly branching out into private equity, last year partnering with Apollo for private equity investments in Europe. It also plans to raise $100m for an India fund.

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Investment banking giant Lazard has purchased the management vehicles of The Edgewater Funds, a Chicago-based private equity firm, for an undisclosed amount, continuing its expansion into the world of private equity.

Edgewater will keep its current management team, which retains a significant economic stake in the firm, Lazard said. Edgewater is focused on growth investments and buyouts in the US mid-market. The firm is led by founder and managing partner James Gordon.

“The addition of Edgewater …will serve as an enhancement to our expanding effort in Chicago, the highly active base for our financial advisory business in the Midwest,” Charles Ward, president of Lazard and chairman of the firm’s asset management group, said in a statement.

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Edgewater manages two mid-market funds, Edgewater Growth Capital Partners and Edgewater Growth Capital Partners II, with about $700 million of assets under management. Edgewater was created 18 years ago, Lazard said in a statement.

Edgewater’s portfolio of investments include testing laboratory Accutest, Harrington Holdings, a marketer of healthcare products, bowling center operator AMF Bowling Worldwide and Beverage House, which makes liquid concentrate for iced tea and other healthy beverages.

Edgewater earlier this month exited ITSolutions to Snow Phipps for an undisclosed amount. The firm acquired the information technology consulting company in 2005.

Lazard has a “history of private equity investments over the years, but it’s not been a significant part of our business”, a spokesperson for the firm said.

Lazard, led by chief executive officer Bruce Wasserstein, has been slowly expanding its business into more dedicated private equity operations. The firm plans to raise $100 million for a private equity fund in India, committing $25 million as the chief sponsor of the fund. The fund will be managed by Lazard India Advisors. In 2008, Lazard formed a non-exclusive strategic partnership with Apollo Global Management to pursue private equity investments in Europe.