Avance, led by ex-Palladium principals, edges closer to Fund I’s $1bn cap

Avance's inaugural fund has already begun investing, earlier this year backing artisans supplier WSP and insurance agency UniVista.

Avance Investment Management, launched by former Palladium Equity Partners executives, is closing in on the $1 billion hard-cap set for its debut buyout offering.

The New York private equity firm published ADV filings saying that as of this month it oversees nearly $824 million in regulatory assets. This indicates it is well past the $500 million target for Avance Investment Partners and is now in sight of the cap.

Avance had originally eyed an $850 million hard-cap for the fund, Buyouts reported in March. The number has since been upped to $1 billion, according to an August report by Los Angeles City Employees’ Retirement System, which by emerging manager standards is high.

The increase may owe to demand from limited partners. Avance has signed up several US pension systems. Among them is LACERS, which is committing $20 million, as well as Connecticut Retirement Plans and Trust Funds and New York State Common Retirement Fund, which are investing $100 million and $250 million, respectively.

PJT Partners is the offering’s placement agent.

After the major challenges of last year’s pandemic-roiled market, emerging managers seem to be riding the crest of much more robust fundraising in 2021. This is especially true for first-timers led by seasoned general partners who built their reputations during careers at big, brand-name PE shops.

Avance is perhaps a case in point. It was founded in May 2020 by managing partners David Perez and Luis Zaldivar and partner Erik Scott, all long-time veterans of Palladium.

Perez was with Palladium for more than 16 years, most recently as president and COO. Zaldivar’s and Scott’s tenures were equally long, with Zaldivar working as a senior managing director, and Scott, as a managing director. The fourth member of Avance’s partnership team, Gretchen Perkins, was a Huron Capital partner before joining last November.

Avance has a strategy that is similar to the one pursued by Perez, Zaldivar and Scott at Palladium. It will make control investments in family- and founder-owned lower-mid-market companies in North America, typically with revenue of $25 million to $250 million and EBITDA of $5 million to $25 million. Opportunities will be sourced across business services and consumer sectors.

Avance’s debut fund has already begun investing. Its first platform deal, announced in April, involved a partnership with Two Sigma Impact to acquire Wholesale Supplies Plus, a provider of raw materials, supplies and packaging for soap, skincare and candle artisans. The seller was Incline Equity Partners.

Later in the year, the firm invested in UniVista Insurance, a franchisor of insurance-related products and services. The two investments illustrate key strategic themes of Avance, such as scalability and buy-and-build M&A opportunities in fragmented verticals.

Another theme, highlighted in the UniVista deal, speaks to rising LP interest in ESG criteria. Avance will target companies led by Hispanic founders, according to the LACERS report, or companies expected to benefit from growth in the Hispanic market. UniVista sells predominantly to Florida’s Hispanic community.

Avance has a team of 14 professionals situated in New York and a second office in Miami. On the investment side, they include principal Drew Assapimonwait, formerly with Comvest Partners, and vice president Jamie Landman, formerly with Prospect Hill Growth Partners.

Avance declined to provide a comment on this story.