VSS loses senior executive ahead of fundraising

Scott Troeller, a senior deal-maker viewed by LPs as part of the next generation of leadership, has left ahead of the launch of the firm's fifth fund, which could happen in the fourth quarter.

Veronis Suhler Stevenson has lost one of its senior deal makers, Scott Troeller, who has left the firm to join hedge fund Fir Tree Partners, multiple sources told Private Equity International.

Troeller, who joined VSS in 1996, was considered a top executive at the firm expected to step into a leadership role as the founding partners gradually left VSS, one limited partner said.

The departure was first announced publicly in a filing with the US Securities and Exchange Commission by Cambium Learning Group, a VSS portfolio company. The company said Troeller was departing the firm and also leaving the company’s board of directors.

Troeller’s departure comes as the firm gears up for the launch of its fifth flagship fund, which will target in the range of $750 million to $1 billion, less than the firm’s fourth fund, which closed on $1.3 billion in 2006. Fund V could be launched in the fourth quarter, a person with knowledge of the firm’s plans said.

However, Troeller’s departure does not trigger a key-man provision in the firm’s funds, and marketing for the fifth fund should not be affected by the loss of the senior executive, sources said. While Fund V will focus on the lower to mid-market under $250 million, Troeller was interested in focusing on different kinds of transactions, the person said.

Troeller could not be reached for comment. VSS declined to comment and Fir Tree Partners did not return a call for comment.

The firm has had significant turnover in recent years. John Veronis, former co-chief executive of the firm, “withdrew” from the partnership in 2010, and co-CEO John Suhler has been reducing his role at the firm and is expected to leave this year, sources said. The firm has had a succession plan in place for about five years, a source said.

Marco Sodi, the co-head of the firm’s European activities, left in 2010 after the firm scrapped plans to raise a separate Europe-focused fund, even after the European team had collected about $104 million and held a first close.

The firm has also had a slew of exits over the past year and has returned about $500 million to its LPs in about 18 months. The firm sold GL Education Group earlier this year for an about 2x return, a source told Private Equity International.

In September, the firm sold Avatar International to The Riverside Company, generating a more than 4x return multiple, sources said.

“Investors will wonder who created the value in the previous funds and if the current team can still do that,” one LP said. “They still have a lot of good people there.”