FdG Partner To “Re-energize” Blum’s Buyout Biz

FdG Associates Managing Partner Doug Dossey has left the firm to attempt to breathe new life into the private equity practice of Blum Capital.

Dossey made the move in August. Blum Capital had approached him in March after he garnered favorable attention for leading FdG Associates’s buyout of infrastructure company Joseph B. Fay & Co. Dossey said he wasn’t looking to leave the firm he spent 11 years with, but found the prospects of Blum Capital’s buyout segment intriguing. As a partner with Blum Capital, he is charged with “re-energizing” the firm’s private equity business, he said.

Blum Capital is a buyout firm with a flexible mandate, embracing private investments in public equity (PIPEs) and minority deals. Likewise, the firm has a generous recycling provision for returns on public equity investments. Dossey said that, over the years, the firm’s business has evolved toward the public markets side, so he was brought in to lead a renaissance of its private deals practice.

“I’ll continue to do the same things I did at FdG, including finding opportunities where Blum can be the first institutional money to the business,” he said. FdG Associates invests almost exclusively in family-owned businesses.

San Francisco-based Blum Capital manages significantly more capital than FdG Associates, which is nearing full deployment on its second fund, a $310 million pool. In February, Dossey told Buyouts that FdG Associates had room for one or two more investments in the firm’s second fund and that it had plans to enter the fundraising market in the second quarter of 2009 to raise a new fund. The firm not yet launched fundraising, postponing those plans until the market improves, an FdG representative said.

In contrast, Blum Capital has at least $2.5 billion ready to deploy from its third and fourth funds, which were raised in 2005 and 2008, respectively. Include recycled capital, and that figure increases significantly. Blum Capital recently exited a private equity co-investment it made when TPG bought Australian retailer Myer. The company went public in November.

Dossey’s last deal at FdG Associates for Joseph B. Fay & Co. was an all-equity deal, which valued the company at $100 million. The civil constructor and demolition company was positioned to gain business from the stimulus package during the first 12 to 18 months of FdG Associates’s ownership. Dossey joined FdG Associates in 1998 having previously worked as an associate at Merrill Lynch.