Ex-Warburg dealmaker’s new shop hits the LP circuit with debut fund

In the slower fundraising market, first-time funds face the toughest challenge among shops jostling for LP capital. But even in this highly competitive environment, new firms are still trying to make their mark.

One of those contenders, Coalesce Capital, the firm formed by ex-Warburg Pincus dealmaker Stephanie Geveda, is hustling to LP meetings, targeting $750 million for its debut pool, sources told Buyouts. Fund I will focus investments, both growth and buyouts, on business services deals, which Geveda led at Warburg, sources said. Park Hill Group is working as placement agent on the fundraising.

No one from Coalesce returned a comment request Wednesday.

First-time funds are always challenging to raise, but especially so in the dislocated markets that compel LPs to stick with their long-trusted relationships and give little attention to newcomers.

The 2022 Buyouts Emerging Manager Survey, conducted by Gen II Fund Services, underscored the challenges. It found almost two-thirds of respondents agreed or strongly agreed that LPs are hesitant about backing first-timers. A mere 15 percent disagreed.

Coalesce has a few points in its favor, however, according to sources. Geveda is a well-known dealmaker who worked at Warburg for more than 12 years, including most recently leading business services. Coalesce’s other founding partner is Henry Stannard, who brings operating experience, most recently as a partner at OC&C Strategy Consultants.

Other executives at Coalesce include managing director Thomas Shi, who joined this year from Flexpoint Ford, where he worked since 2016, and principal Shash Chugh, who worked at Warburg Pincus earlier in his career.

Some of her investments included Aramark, GrubHub/Seamlessweb, Electronic Funds Sources, WEX, Endurance International Group and GA Foods. Another of her investments was Hygiena, which provides food safety and environmental testing services, which Warburg sold last year to EW Group.

Also, the firm is getting a boost from Geveda’s former shop, with Warburg executives set to make a pledge to the fund, according to an article last year in the WSJ.

Coalesce is searching for investments as it fundraises, which is a strategy emerging managers have employed in the tough fundraising environment. It’s almost like a hybrid of the independent sponsor model and the commingled fund.

The manager finds investments and then gathers capital from select investors to make the deal, eventually shifting it into the fund.

Other first-timers that have been out in the tough market environment include GrowthCurve Capital, which raised about $1.1 billion as of October for its debut fund. It’s not clear if that fund is still in the market. Another is Integrum Holdings, which is targeting $1 billion for its debut fund.