First-time fundraiser P4G Capital lets carry flow down the ranks

  • Firm: P4G Capital Partners
  • Fund: P4G Capital Partners I
  • Target: $200 mln
  • Cap: $300 mln
  • Raised to date: $70 mln

P4G Capital Partners, which is raising its debut fund, has a carried-interest structure that lets profits flow throughout the organization rather than stay concentrated with top executives, said Rachel Lehman, managing director.

Lehman launched the San Francisco firm in 2015 along with co-founder and Managing Director Hugh Browne. The firm takes its name from “partners for growth.”

P4G Capital Fund I has raised about $70 million so far, after officially hitting the market at the end of 2016, Lehman said. The fund is targeting $200 million with a $300 million cap, according to a marketing document seen by Buyouts.

P4G is offering LPs that commit by the first close no fee and no carry on $40 million to $50 million of co-investments, the marketing document said.

The firm is charging market-rate terms on the fund, with a 2 percent management fee and 20 percent carried-interest rate, with an 8 percent preferred return, according to the marketing document.

While carried interest is usually concentrated with founders, P4G will distribute carry to the junior ranks and even to the captive consultant team, Lehman said.

“We’re spreading carry very fully throughout the organization to people closest to the portfolio companies,” she said. Therefore, an LP committing to P4G is betting not only on the founders but on the firm as an institution, she added. “Lots of GPs have trouble retaining talent [and that] mostly has to do with the fairness of the economic split within the GP.”

P4G focuses on companies with $3 million to $15 million of EBITDA across aerospace/defense, business services, manufacturing, industrials and energy services.

Before co-founding P4G, Lehman spent about 10 years at Sorenson Capital, where she was a managing director. From 2012 to 2014, she was chief operating officer and head of strategic development at FiveCurrents, an entertainment and production management company.

She also worked for the Salt Lake Organizing Committee for the 2002 Olympic Games, Arbros Communications & CrossMedia and Visa, where she was a VP in strategic planning and business development.

Browne was a principal at Rho Ventures from 2008 to 2015, according to his LinkedIn profile. Prior to that, he was a venture associate at Morgan Stanley Venture Partners from 2004 to 2006. He has served on numerous boards.

P4G made two significant hires this year, bringing aboard Mark Allums and Shamus Dailey as vice presidents in March.

Allums most recently was a core services manager at T&T Engineering Services Inc from 2014 to March of this year. Previously, he was engineering manager at Loadmaster Engineering from 2012 to 2014, his LinkedIn profile said.

Dailey most recently was a senior associate at Main Post Partners for two years, prior to which he was an associate at Bison Capital. He spent almost three years as an investment banking analyst at MidSpan Partners.

On the deal front, P4G in June acquired the assets of aerospace and defense manufacturing service providers Fore Machine Co and Aero Components Inc.

Action Item: Reach Rachel Lehman at or at +1 415-510-2160.

Photo of Rachel Lehman courtesy of P4G.