While Lincolnshire Management, in its transition phase, has nearly completely turned over its original roster, three members of the old guard have linked up to launch a new firm, Corinthian Capital Partners. Steven Kumble, Peter Van Raalte and Kenneth Clay, all three listed as plaintiffs in a pending lawsuit against Lincolnshire (see story, previous page), will be the three principals of the new firm, which according to sources will resemble Lincolnshire in its earlier days.
The firm is said to already be shopping for deals, and like Lincolnshire, is pursuing “old economy” businesses in the middle market.
The desire to launch the firm was twofold sources say. For one, at Lincolnshire, the three Corinthian principals felt constrained in actually getting deals done. The lawsuit against Lincolnshire specifically states that the Kumble-originated deals were consistently rejected by the investment committee, occasionally “within minutes” of the deals being submitted.
A source claimed, “There’s an investment committee comprised of four people. [T.J.] Maloney’s a lawyer by training and [Michael] Lyons is an accountant. So you’ve got a lawyer and accountant basically making all the decisions, and invariably they’ll find a reason to reject every deal that comes down the pipeline.”
The second factor that motivated the principals was a desire to get back to their roots. The source noted that Corinthian could be expected to keep its headcount to a minimum, with the principals investing a significant amount of their own money in each transaction.
Another motivator, but not mentioned by the source, was that the situation at Lincolnshire became untenable for the Corinthian principals. The aforementioned lawsuit describes that Clay’s contract was terminated, while the environment became increasingly hostile for Kumble and Van Raalte.
The source couldn’t discuss any specifics about the potential for a future Corinthian fund.