Fairview Capital loses third partner in two years — but not faith of Connecticut pension

  • Assets under management: $7.8 bln in discretionary assets
  • Whom to contact: CEO Kolawole Olofinboba at kolofinboba@fairviewcapital.com
  • Why this is important: The LP has processes to protect its performance in the event of senior manager departures

Fairview Capital has lost its third partner in two years — but not the faith of a key LP.

Doug Boains is the latest; he departed in August after nearly a dozen years with the firm.

The departures have raised concern at Connecticut Retirement Plans and Trust Funds, which has invested $743 million in Fairview across six funds.

But the pension system has been impressed by Fairview’s performance and will likely re-up another $100 million to a fund the firm manages.

Fairview was founded in 1994 by JoAnn Price and Laurence Morse. The firm manages co-mingled and customized separate accounts that are primarily mandates for venture capital and emerging-manager funds of funds.

Boains, who was Fairview’s COO and CFO, is now director of the alternative-investments group at Raymond James, his LinkedIn profile shows.

In 2016, Matt Schaefer and Rebecca Connolly left Fairview to form Tiger Iron Capital, which provides semi-discretionary, separate-account management for institutional clients.

Both had been longtime partners. Schaefer had been with the firm since 1999 and had served on the investment committee for almost 17 years. Connolly joined Fairview in 2004 and was a member of its investment committee for 12 years.

Fairview also lost Principal Mishone Donelson in 2016. He joined Horizon Technology Finance as a managing director, according to his LinkedIn profile.

Boains joined Fairview in 2006 as controller and chief compliance officer and worked his way up to partner in 2013.

“Boains’s departure had not triggered any key-man provisions, but Fairview discussed it with all its investors,” Fairview Managing Partner Kolawole Olofinboba told Buyouts.

“In the last three years, we lost no clients or investments, expanded our roster of clients and more than doubled assets under management,” Olofinboba said.

To protect continuity of performance and service, Fairview had certain processes in place, Olofinboba said. For instance, investment relationships are vested at the firm level and not with individuals, he said.

Additionally, team members are cross-trained so they can step into roles to ensure continuity in cases of departures, Olofinboba said. 

Accordingly, Fairview promoted Peter Ruchwa to controller-fund operations and Crystal Floyd to corporate controller after Boains left, pension documents show.

“Both had worked extensively with Boians, so the transition was pretty seamless,” Olofinboba said. 

Olofinboba was promoted to Managing Partner as part of Fairview’s succession planning exercise in 2015. In addition, the firm promoted Alan Mattamama to partner at the time. 

Cynthia Tseng and Aakar Vachhani, both with Fairview for more than a decade, were also promoted to partner and became members of the investment team after Schaefer and Connolly  departed. 

Fairview Capital manages four Constitution funds for Connecticut RPTF. The system’s exposure to Fairview was $743 million across six funds, or 18 percent of its PE portfolio, documents said.

Fairview produced an internal rate of return of 19.6 percent and a total value-to-paid-in-capital multiple of 2.1x, as of June 30, 2018. 

In a public document, Connecticut expressed concern about senior-level departures from Fairview since 2016. The departures raised concerns about losses in investments, operations expertise, institutional knowledge and manager relationships, the document said.

Still, Connecticut is mulling a $100 million re-up to the fifth Constitution fund. The risk of underperformance is mitigated by Fairview’s long-term track record of executing the fund-of-funds strategy, pension documents said.

In addition, the current investment team continues to maintain and develop key manager relationships, as evidenced by the high percentage of repeat managers in the Constitution portfolio, pension documents said.

For instance, the capital committed to repeat GPs was 91 percent in the fifth Constitution fund, up from 71 percent in the fourth, 74 percent in the third and 65 percent in the second Constitution funds, the pension documents said. 

Fairview’s PE and VC managers include Battery VenturesBessemer Venture Partners, Khosla VenturesLightspeed Venture PartnersNew Enterprise Associates, Sierra Ventures and Technology Partners.

Action Item: Read Fairview’s Form ADV here: https://bit.ly/2Ovug7X.

Correct: This article has been corrected to show Kolawole Olofinboba’s title is managing partner.