- Mid-market LBO business led by Colin Taylor, Susan Schnabel
- Portfolio valued at $2 billion as of Dec. 31
- aPriori to raise capital in the future
The new firm will be led by Colin Taylor and Susan Schnabel, co-heads of DLJ Merchant Banking Partners, which manages a portfolio of 22 companies. The new firm will operate out of New York, Los Angeles and London.
All the investment pros from the DLJ Merchant Banking Partners team will join aPriori Capital. It will manage DLJ Merchant Banking Partners III LP, which closed at $5.3 billion in 2001, and DLJ Merchant Banking Partners IV LP, which raised $2.1 billion in 2006.
“aPriori is expected to be a strong platform for the DLJ MBP team to manage and maximize the value of the MBP Funds as well as raise capital in the future,” Credit Suisse said in a prepared statement. A spokeperson for the firm did not return a phone call or email from Buyouts.
The spinoff marks the end of a 14-year ownership of DLJ Merchant Banking by Credit Suisse. The firm had been under the wing of Nicole Arnaboldi, vice chairman of Credit Suisse’s Asset Management business.
Taylor and Schnabel said their team is “excited by the opportunity to establish an independent fund advisory business and a new platform for the future,” according to a prepared statement.
This spinoff came as part of Credit Suisse’s divestment plans, prompted by new capital rules resulting from the Dodd-Frank financial reform legislation and other rules on capital adequacy in the wake of the 2008 financial crisis. Last November, Credit Suisse spun off its $3.6 billion mezzanine specialist DLJ Investment Partners to Portfolio Advisors.
Last year, Coller Capital received clearance from the Federal Trade Commission to buy Credit Suisse’s interest in DLJ Merchant Banking Partners IV, according to a filing.
DLJ Merchant Banking’s alumni include Larry Schloss, who took four partners with him to form Diamond Castle in 2004. Schloss is now president of Angelo Gordon after working as chief investment officer and deputy comptroller of the New York City Retirement System.
Thompson Dean, who led DLJ Merchant Banking for 10 years, formed Avista Capital Partners in 2005.
DLJ Merchant Banking Partners III turned in an IRR of 20.2 percent as of Sept. 30, 2012, for the Pennsylvania Public School Employees’ Retirement System, according to performance data compiled by Buyouts.
Credit Suisse acquired Donaldson Lufkin & Jenrette in 2000 for $11.5 billion. At that time, French insurer AXA Financial owned a majority stake in DLJ.