Privately Speaking: Bregal Partners

Some of the most successful private equity partnerships that come along have been built on the long-term relationships between a pair of general partner (GP) personalities, often those that have stayed the course through up and down business cycles.

For anyone familiar with the large cap buyout fund world, certain names at top private equity institutions spring to mind. Think of Henry Kravis and George Roberts of KKR, and the Blackstone Group’s Pete Peterson and Stephen Schwarzman.

The mid-market has also sprouted GP duos with long, fruitful relationships. Bob Bergmann and Scott Perekslis are two buyout veterans within this market who have spent almost a quarter of a century investing capital in the mid-sized market segment together.

Like their mega-fund peers, the duo also cut their teeth at two prestigious banking houses in the 1980s. Perekslis learned the M&A trade at Lazard Frères, while Bergmann earned his credentials at Wall Street’s Donaldson, Lufkin & Jenrette banking franchise.

The banks served as springboards for the pair to join New York’s Centre Partners, a mid-market buyout group established by Lester Pollack, a founding partner of Odyssey Partners, in 1986. Bergmann joined Centre Partners in 1989 and Perekslis two years later.

It was there they gained the credentials that would see them become buyout entrepreneurs in the 2000s. They remained at Centre Partners throughout the buyout frenzy period of the mid-2000s and post-financial crisis. They built up a market-proven ability to originate and execute successful realisations of companies such as Bumble Bee Foods, Garden Fresh Holdings Inc and Nexus Gas Holdings LLC.

During their tenure at the firm, they invested more than $3 billion, bolstered by co-investment support from financial sponsors such as Fairmont Capital, and the private investment arm of limited partner (LP) Northwestern Mutual Life Insurance Co.

The relationship Perekslis and Bergmann established with one LP – Bregal Investments – during their time at Centre Partners would later lead to an entrepreneurial move to strike out on their own.

In 2003, Bregal Investments, which is the global private equity and fund investing arm of the sixth-generation Zug, Switzerland-based family holding company Cofra Holding AG, invested $600 million in a Centre Partners’ fund.

It was this that set the foundation for the next phase of Bergmann and Perekslis’ private equity careers almost 10 years later. Since 2002, Bregal Investments has invested more than $10 billion in private equity.

Today, Bergmann and Perekslis sit at the helm of Bregal Partners, which shares a brand name with its Swiss-based backer. As managing partners of this New York private equity firm, they concentrate on investing in control-oriented transactions involving US mid-market companies in some of the most private equity-attractive industry sectors in North America: consumer, food and retail, energy services, and healthcare.

The industry focus is not surprising. It stems from the expertise Perekslis and Bergmann accrued from investing in those sectors over two decades of deal-making.

ANCHORS AWEIGH

The duo left Centre Partners in January 2012. One month later, they launched Bregal Partners, with backing from Bregal Investments. The latter committed $500 million to support the pair’s debut fund. A significant mid-market player in North America had been established.

Bergmann and Perekslis’ experience, coupled with the LP’s familiarity with the duo’s business credentials, helped the pair convince the LP to stump up capital extremely quickly. Such was their familiarity with their LP, they did not even have to travel to its headquarters in Zug, Switzerland. Instead, all the discussions with Bregal Investments took place in New York, sidestepping the need to travel to Europe that would otherwise have been par for the course.

“We left Centre in January 2012, and in February 2012 we closed with a new $500 million fund. It was a very quick process which was largely a reflection of Bregal’s comfort with the two of us as investors given their intimate knowledge of our track record,” Bergmann says.

Since securing the backing of Bregal Investments three years ago, Perekslis and Bergmann have made six platform company investments and 16 add-on acquisitions.

The duo have also built an 11-team member staff, comprised of three senior level professionals, a senior adviser, an associate pool and support staff. The fund managers are focused on investing $25 million to $75 million of equity in companies generating $10 million to $75 million or more in earnings before interest, taxes, depreciation and amortisation.

With co-investment support from Bregal Investments, the two dealmakers have the capacity to invest up to $150 million in deals.