Fourteen is about the age that many children begin aching to break away from their parents, live independently and see for themselves what the world has to offer.
So it is with Caxton-Iseman Capital, which has amicably ended its 14-year partnership with Bruce Kovner's investment firm, Caxton Associates, taking its investment team and nine portfolio companies.
The New York firm, led by Frederic Iseman and Steven Lefkowitz, is now called CI Capital Partners. And, like many parents with children striking out on their own, the firm is starting out with capital partly contributed by Kovner. He and Iseman say they will together invest up to $100 million (€69 million) in CI Capital, which has been actively doing deals since spinning out in late December.
“Fred Iseman has been a wonderful partner, friend and investor during the past 14 years. Without sacrificing the goal of capital preservation, Fred and his team have generated strong returns,” Kovner said in a statement. “Based on the trust I have in Fred and his team and their proven record of success, I have committed to invest up to $50 million with CI Capital Partners.”
Iseman characterised the spin-off as the “logical next step” in the firm's evolution. Among other things, he said it will enable CI Capital to diversify its investor base, pursue larger acquisitions and expand internationally.
“Nonetheless,” he added, “we remain committed to executing the strategy that has made us successful – building businesses over the long term with the primary objective of realising significant capital appreciation and generating a high multiple of invested capital.”
Caxton-Iseman notably recouped a return of more than 23 times last year from its investment in Anteon International, a government IT platform company it began building in 1996 and took public in 2002. Agreed in 2006 and closed in 2007, the exit was 10 years in the making and came in the form of a $2.2 billion sale to General Dynamics.
The firm's existing portfolio includes manufacturing firms, such as Valley National Glass and KIK Custom Products, as well as buffet restaurant chain operator Buffets Inc, healthcare services firm Prodigy Health Group, federal IT services company CoVant and plumbing services company American Residential Services.
CCMP RECRUITS EXECUTIVE ADVISORS
CCMP Capital Advisors, which spun out from JPMorgan in 2006, has hired John Bowlin and James Shelton as executive advisors, increasing its stable of operational expertise. Bowlin will advise on investment opportunities in the consumer sector, having previously acted as chief executive of Miller Brewing and international president of Kraft. Shelton will direct his expertise towards the healthcare sector. His prior experience includes roles as chairman and chief executive of Triad Hospitals and he is currently board chairman of Legacy Hospital Partners. In October 2007, the firm closed its first fund on $3.4 billion.
LIGHTYEAR PROMOTES THREE IN NEW YORK
Financial services-focussed Lightyear Capital has promoted David Cynn and Thierry Ho to managing director, while Michal Petrzela has been promoted to vice president. Cynn and Ho will continue to be responsible for sourcing deals and managing investments, the firm said. Cynn joined Lightyear in 2002, having previously held investment banking positions at Morgan Stanley and HSBC Investment Banking. Ho joined the firm in 2000, having previously worked with senior members of the Lightyear team at PaineWebber. Ho has also held investment banking roles at JP Morgan and Goldman Sachs. Petrzela joined Lightyear in 2005, after having worked for the firm as a summer associate in 2004. New York-based Lightyear currently manages roughly $3 billion (€2 billion). The firm's most recent fund closed in March 2007 on $850 million.
OCTAVIAN ADDS TO DISTRESSED DEBT TEAM
Asset manager Octavian Advisors has added two to its distressed debt team in response to current market conditions. Arif Gangat joined the firm from Southpaw Asset Management, and Oscar Mockridge from Sailfish Capital Partners. Gangat and Mockridge become managing directors specialising in distressed debt investments outside the US. At Southpaw, Gangat oversaw distressed debt and special situation equity investments. Before, he was a managing director at Sandell Asset Management. Mockridge worked on leveraged finance research and activist investing at Sailfish. Prior to that, he was a senior vice president in Halcyon Asset Management's distressed debt and special situations team. Octavian is headquartered in New York and currently manages $1.1 billion (€751 million) in assets.
CITI ALTERNATIVES LURES CARLYLE EXEC
Citi has hired away Carlyle Group's Ned Kelly to be president of its alternative investments group. Kelly was previously co-head of Carlyle's global financial services group. Kelly joined Carlyle in June 2007 to launch the financial services team along with David Zweiner. Before joining Carlyle, Kelly was a vice chairman in the PNC financial services group following PNC's acquisition of Mercantile Bankshares in March 2007. Kelly had been chairman, chief executive and president of Mercantile Bankshares since March 2001. Before that, he was a managing director at JPMorgan Chase, where he was head of global financial institutions and co-head of investment banking client management. At Citi Kelly will report to John Havens, chief executive of Citi Alternative Investments.
NEW CEO AND PRESIDENT FOR CAP Z
Christianna Wood, senior investment officer for global equity at the $237 billion (€160 billion) California Public Employees' Retirement System, has become chief executive of New York-based alternative asset manager Capital Z Asset Management. Wood was with CalPERS since 2002 and departed in mid-February. Her role was filled initially by Eric Baggesen, previously a senior portfolio manager. During her five years at CalPERS, Wood was responsible for managing $150 billion in domestic and international public equities. In addition, Capital Z has promoted Elizabeth Flisser, 34, to be president of Capital Z Asset Management. Flisser has been with Capital Z since 1999 and was responsible for its hedge fund sponsorship programme and the firm's structured products and strategic investments.
FORMER JPMORGAN CHIEF TO ADVISE AURORA
Aurora Capital Group has added former JPMorgan Chase chief executive William Harrison to its advisory board. Harrison will help the firm source deals and evaluate prospective executives, Aurora said. Harrison led JPMorgan Chase from 2001 until he ceded the chief executive position to Jamie Dimon at the end of 2005 and the chairman role to Dimon in 2006. He began his career at Chemical Bank in 1967 and remained there until 1992, when he began overseeing a series of mergers that eventually led to the creation of JPMorgan Chase. Aurora Capital was founded in 1991, and is headquartered in Los Angeles. The firm currently manages around $2 billion (€1.3 billion) through three private equity funds.
GOLDMAN EXEC JOINS QUADRANGLE
Doug Kramer, former head of Goldman Sachs' global manager strategies group, has been named COO of Quadrangle Group and will help launch the firm's asset management business. At Goldman, Kramer oversaw the identification, evaluation, selection and monitoring of managers across all traditional asset classes. He joined the investment bank in 1999 and was made partner in 2006. Kramer will be based in New York and oversee non-investment operations and strategic development, including the development of Quadrangle's newest initiative, Quadrangle Asset Management (QAM). Though nascent, QAM is already believed to be managing several billion dollars, as it was selected earlier this month to manage Michael Bloomberg's investments. Eight-year old Quadrangle has more than $6 billion of assets under management.
LEE EQUITY HIRES GE VETERAN
Robert Wright, General Electric's vice chairman and former head of NBC Universal, has been hired as senior advisor to two-year old New York private equity firm Lee Equity Partners. Wright is currently vice chairman and director of GE and until last year had been chairman of its media group, NBC Universal, since 2001. He was named president and chief executive of NBC in 1986, prior to which he led GE Financial Services. Allen Questrom, formerly of JC Penney and Barneys New York, is the firm's other senior advisor. Lee Equity Partners makes growth investments of between $100 million and $500 million and has yet to announce a fund close.
MOSELEY JOINS STEPSTONE
US advisory firm StepStone Group now has offices on both coasts with the hire of Stephen Moseley as a New York-based president. “It's clear that having more horsepower in this time zone will be helpful, because New York is central to the private equity universe,” Moseley told PEI. Moseley was most recently a managing director at Estes Management, which administered a $775 million co-investment fund. Before, he was a managing director and co-president of PCG Capital Partners, an affiliate of gatekeeper Pacific Corporate Group that managed a $500 million direct investment fund and a $150 million co-investment fund. The PCG background is a common denominator among StepStone's founders and senior executives. “There's a lot of common history and that gives us all comfort,” Moseley acknowledged. “I've always thought it would be great to grow a business with people I know well. Here's a chance to do that [in] an industry that I believe in.”
PAUL CAPITAL IN BRAZIL HIRE
US secondaries and fund of funds firm Paul Capital Partners has hired Duncan Littlejohn to run its São Paulo office, an expansion move that follows the opening of the firm's Hong Kong office last year. Littlejohn joined Paul Capital earlier this year and has served as a consultant to the firm since 2007. He has been in Brazil since 1989 and was previously a partner at Brazilian private equity firm BPE Investimentos and its predecessor, Brasilpar. Paul Capital is the first secondaries firm to open an office in Latin America, said David de Weese, a New York-based partner. The firm's foreign offices often uncover secondary opportunities the firm wouldn't otherwise see, such as those originating from quasi-government organizations and wealthy families, de Weese said. The Brazilian office was established approximately one year ago to help the firm conduct due diligence on secondary private equity transactions in the region as well as source potential sellers of partnership interests throughout Latin America.
The firm's Hong Kong office was opened in August 2007 by Jason Sambanju, who joined the firm as a principal at the same time. Sambanju is charged with sourcing and executing secondary transactions in Asia as well as providing due diligence in support of transactions outside the region which have a significant Asian element.