Evercore sells stakes in five companies

Accretive Exit Capital Partners has closed the first deal for its initial fund, paying $110 million to Evercore Capital Partners for “meaningful minority positions” in five of its portfolio companies.

The companies involved in the Evercore Capital deal include Davis Petroleum, a Houston-based company involved in oil and gas exploration and production; Diagnostic Imaging Group, a Hicksville, N.Y.-based provider of outpatient imaging services; Test Equity, which distributes test measurement equipment and is based in Thousand Oaks, Calif.; Mr. Bult’s Inc. a Burnham, Ill.-based long-haul transporter of municipal waste; and alliantgroup, a tax consulting firm also based in Houston.

Accretive Exit Capital purchased the stakes from the vintage 2002 Evercore Capital Partners II, which raised about $660 million, Reilly says. Evercore Capital Partners is the private equity unit of publicly-traded Evercore Partners.

Andrew Reilly, managing director of Accretive Exit Capital, says the firm is already lining up exit opportunities for Davis Petroleum, whose other investors include Bain Capital affiliate Sankaty Advisors and Los Angeles-based Red Mountain Capital Partners. Davis Petroleum was purchased by the Evercore Capital-led group in March 2006 for about $150 million. Accretive Exit Capital has purchased a 12.5% stake in Davis and is close to bringing three “top 10” buyers to the table, Reilly says.

Boston-based Accretive Exit Capital is a secondary-direct investment firm founded by Edwin Wang. It was formerly known as Asymmetry Capital, which operated from 2002 to 2007. The firm buys stakes in late stage growth companies from vintage 1999-2003 buyout funds, zeroing in on top-tier assets.

Secondary-direct investing in buyout funds has grown rapidly in the past few years, even more so now because of tightness in the capital markets. The practice is attractive to GPs who need to get some liquidity out of an older fund, perhaps to satisfy antsy LPs.

For secondary-direct firms, the deals give them the chance, if they choose wisely, to participate in a profitable exit in a shrunken timeframe.

USA!! Among the more prominent secondary-direct firms are New York-based VCFA Group, which was formed in 1982 by Dayton Carr mainly for this purpose; Coller Capital, which has about $8 billion under management; New York-based W Capital Partners; and Saints Capital of San Francisco. —Michael Baron