Braemont edges past Fund I’s $500m target in chilly market for first-timers

Covington set up Braemont to be a 'relationship-driven' growth equity investor in defensive growth niches in enterprise (B2B) and consumer (B2C) end-markets.

Robert Covington, Braemont Capital

Braemont Capital, founded by RedBird Capital Partners veteran Robert Covington, secured $502 million in the close of a debut growth equity fund.

Braemont Partners I wrapped up ahead of an original target of $500 million, according to an ADV filing made this week and sources with knowledge of the firm. Braemont declined to comment.

Fund I, unveiled in August 2021, navigated an arduous market for emerging managers. Many LPs, a large share of them overallocated to private equity, are compelled to provide their limited capital to re-ups with incumbent GPs. They are for this reason often neglecting new relationships.

The 2022 Buyouts Emerging Manager Survey, conducted by Gen II Fund Services, underscored the challenges. It found that almost two-thirds of respondents agreed or strongly agreed that LPs are hesitant about backing first-timers.

On the other hand, LPs retain an appetite for emerging managers formed by seasoned GPs. Probitas Partners’ 2023 survey found that 75 percent of investors are interested in spinouts, where teams have accumulated significant prior experience.

This may have been key for Braemont, launched in July 2021 after Covington departed RedBird. He was with RedBird for seven years, most recently as a partner investing in business and financial services, communications infrastructure and tech-related companies. Before, he was with Stephens Group and SSM Partners and founded a startup called Firstdoor.

Covington previously told Buyouts he wanted to create his own PE shop for some time: “I started my career as an entrepreneur and built a business from scratch. I wanted an opportunity to build something from scratch again, something that had my thumbprints on it.”

He said he discussed the idea “for about a year” with RedBird founder Gerry Cardinale.

Covington set up Braemont to be a “relationship-driven” growth equity investor in defensive growth niches in enterprise (B2B) and consumer (B2C) end-markets. Target companies are located in North America and operate across technology, business services and financial services verticals.

Braemont partners with families, founders and other owner-operators of businesses positioned to grow organically as well as through M&A. It writes checks of $25 million to $200 million, upfront or over time, acquiring either control or minority interests of above-average duration.

“It takes time to build great companies,” Covington previously told Buyouts, something that cannot happen if the focus is on “premature sales.”

Fund I last year completed the first of an expected seven to 10 platform investments. Braemont and JettyCove recapitalized RedTeam Software, a construction management software provider, in part to support the acquisition of Paskr, a cloud-based construction management solution.

Covington manages a team of 14 professionals based in Dallas and New York. Senior members include two other partners: Jeff Volling, who joined from Bessemer Investors, and Herb May, who joined from DH Capital to lead the firm’s entrepreneur and family office partnerships.

Other senior investment professionals are principal Eliza Calihan, formerly with Reverence Capital Partners, and vice president Max Green, who worked with Covington at RedBird.