Colt Capital Expands Firm and Fund –

Colt Capital Group, a Westport, Conn.-based private equity firm, this month welcomed Kerri Cagnassola as the firm’s first chief financial officer. The firm is also quickly approaching a final close on its second fund that will wrap up at approximately $75 million.

The new hiring and the fund raising are both reflections of the growth occurring within the firm, which was founded in 1998 by Daniel Levinson and Amy Weisman. In addition to being named CFO, Cagnassola now holds the title of partner alongside Levinson, Weisman and Marshall Kiev.

Weisman said the firm expects to add another professional at the partner level within the next few months.

Cagnassola joins Colt Capital from the finance department of Whitney & Co., which followed a five year stint at Ernst & Young LLP. She is responsible for communicating with the investors in Colt’s funds and reporting news from the firm’s operating companies. Colt Capital decided to take on Cagnassola in anticipation of the increasing fund size and deal flow.

The firm’s most recent fund, Colt Capital Group II SBIC, was licensed by the Small Business Administration (SBA) five weeks ago and expects its second and final close of just over $75 million in the next month, said Weisman. The fund held a first close on $17 million last year.

Colt Capital looks to make investments of between $2 million and $10 million as growth capital. It will take either a minority or majority interest in bricks-and-mortar companies in the U.S. The firm recently signed a letter of intent on an undisclosed deal, which will be the first investment from this fund.

A Team Effort

Colt Capital forged into the private equity world with a unique structure, which Weisman holds responsible for the success of the fund. The firm emphasizes a close relationship between the fund, its operating companies and its investors, who are executives and operators in a vast array of industries. Weisman said it is this unique relationship and leveraging of expertise that draws investors to the fund and is the fund’s main source of deal flow.

The fund has over 75 individual investors as its limited partners and operating partners including such individuals as Michael Goldstein, the chairman of Toys-R-Us; Ben Kozuch, the president and co-owner of Future Media Concepts, a digital media software training company; Michael Napolielo, a former senior executive at Bristol-Myers Squibb and Yamanouchi, USA; and David Cheifetz, the founder and former chief executive officer of Full Circle Media, an owner and operator of trade shows and magazines.

With the second fund, Colt Capital attracted 35 new investors and also welcomed a small group of institutional investors, made up entirely of banks.

The success of Colt Capital’s first fund, which raised only $11 million, gave the firm confidence that its second fund could aim much higher. That fund found such an abundant deal flow that it ultimately put out $30 million by using equity from the fund in addition to conducting deal-by-deal raisings.

In December, Colt Capital partnered with TBM Holdings Inc., a publicly traded company, to acquire the assets of Blue Giant Ltd. for $11 million, forming Blue Giant Equipment Corp., a material handling equipment business (Buyouts December 4, 2000, p. 16).