Done Deals: Direct Equity Goes to College –

Direct Equity Partners LP, a $100 million fund focusing on direct marketing deals, closed a $4 million deal this month with Mascot Network, a provider of campus intranet communities for colleges and universities.

Direct Equity Partners LP is a joint venture fund created with a $100 million commitment from Madison Dearborn Capital Partners III LP into boutique investment bank, Gruppo Levey & Co. (BUYOUTS, January 10, p. 9).

Mascot Network, assisted by Direct Equity, will focus its direct marketing campaign toward university administrators at the president, provost and dean levels in order to expand across more campuses. Meanwhile, they will recruit commercial partners that would like to grab the marketing gold ring of college student attention – a group that often continues its early buying habits later in life due to brand loyalty. Direct Equity Partners was just as attracted to Mascot’s student audience as it was to a management team that is well-versed in the demands of the college market, said Patricia Campbell, president and managing director of the fund.

“[The management team of Mascot Network] is a group that all came out of Harvard business school and really understand the college market,” Campbell said. “The CEO [Jason Palmer] had actually built a business marketing to students . . . previous to going to Harvard. So he’s had experience with the whole genre of marketing to students.”

Campbell said Direct Equity also liked the idea of being able to pin down a student audience, which is difficult to do offline as they are constantly moving and changing addresses. Mascot is a direct link to college campuses with the permission of the administrators.

“The education space and the Internet environment with students is just a natural [match] – most students are online,” Campbell said.

Campbell, who has worked in direct marketing for 25 years, has more than a little experience in the direct marketing sector as well. She has been on the board of the Direct Marketing Association for nearly seven years – an organization she was chairman of two years ago. Campbell also has experience with the e-commerce business model through her position as vice president of interactive marketing with barnesandnoble.com. She will take a seat on Mascot Network’s board.

So far the company has faced little resistance to growth. Mascot Network has already signed up fifty schools, and Campbell said, “Over the next couple months [that number]could easily double.”

Additionally, Direct Equity and Patricof & Co. Ventures Inc., which retained a significant stake in the company, will keep an opportunistic eye open for strategic alliances and possible add-ons. Mascot has already begun to develop alliances with access to college administrators from slightly different angles, said Campbell.