A group of former senior executives from Palladium Equity, including ex-president David Perez, are targeting around $500 million for the debut fund on their newly formed shop, sources told Buyouts.
The firm, Avance, is one of a group of first-time funds testing the challenges in the market brought on by the pandemic lockdown and subsequent wobbly financial environment. Limited partners are generally understood to be mostly interested in backing existing managers, forgoing new relationships, especially with new GPs.
However, certain firms, mostly those formed by GPs from larger shops with track records of successful investing, are still attracting capital. This includes Growth Catalyst Partners, which just closed its debut fund on $130 million.
Avance was formed by managing partners Perez and Luis Zaldivar. Perez was president and COO of Palladium Equity Partners, where he worked from 2003 until last year, according to his LinkedIn profile. Zaldivar worked at Palladium from 2003 until earlier this year, his LinkedIn profile said.
Fund I is live in the market, with an expectation that a first close could come in early 2021, sources said.
Two other senior executives round out the team: Erik Scott, partner, who worked at Palladium Equity from 2005 until earlier this year; and Gretchen Perkins, partner, who worked at Huron Capital from May 2008 to this month, her profile said.
Avance focuses on the services and consumer sectors, looking for lower mid-market companies with $5 million to $25 million EBITDA, strong management teams and favorable cash flow dynamics.
Avance will target buy-and-build M&A in founder-owned businesses. Services could include healthcare, insurance and financial, human capital management, environment, health and safety, supply chain and logistics, IT & data and property management.
Consumer could include food products and ingredients, residential products, fitness, health and wellness, auto and marine after-market and e-commerce, among other things.
A group of executives, including Perez, left Palladium earlier this year. Palladium named six managing directors to partner and members of the managing committee, according to a January announcement.
A spokeswoman for Avance declined to comment.