Flexpoint Shows New Muscle –

There is the Jerry Ford who was once known by Richard Nixon aids as “impeachment insurance,” and the Jerry Ford who has made a killing actually investing in insurance. Lest there is any confusion, it is the latter-no relation to the former president-that is the cornerstone LP in the inaugural fund of Chicago-based Flexpoint Partners.

The relationship between Jerry Ford (the investor) and Flexpoint Founder Donald Edwards goes back to the late 1980s, when Edwards, as a banker at Lazard, would work on Ford’s many financial services deals. Later, Edwards moved on to GTCR Golder Rauner, where he focused on healthcare, but the pair kept in contact and was reunited when Ford brought him on to run public shell Liberte Investors in 2003. There, Edwards helped engineer the acquisition of USAuto Holdings, a consumer auto insurer, and following the deal, parted ways to launch Flexpoint Partners.

Flexpoint, which marries the financial services expertise of Ford with the healthcare focus of Edwards, earlier this month closed its inaugural fund. The firm corralled $225 million, easily surpassing its initial $150 million target, but in order to stay true its self-imposed cap, it was forced to turn back a number of interested investors.

The official fund launch occurred this past January, and within two months a number of blue-chip limited partners wanted in. Yale University, MIT and the Common Fund all joined Ford in backing Flexpoint, while wealthy individuals and some other smaller investors filled in as well. Ford was the largest backer with a $50 million investment in the fund.

The Flex

Flexpoint defines itself as a private equity firm, but, as the name implies, it is more flexible in the investments it pursues. The firm will look to make the standard, control-oriented private equity transaction, but will also pursue growth equity deals, PIPE investments or even passive positions in public companies should the right opportunities arise.

For Edwards, it was the opportunity to start a firm with this kind of looser mandate that originally appealed to him, and the prospect of again partnering with Ford also influenced his decision. Moreover, while at GTCR, Edwards focused primarily on larger transactions, and with Flexpoint, he wanted to establish a firm that could go after the smaller deals, where he sees a lot of appealing opportunities in the healthcare and financial services space.

In discussing the firm’s sector focus, Edwards noted that while there are a number of other firms that compete in the same sectors, he believes that the breadth of the two industries should leave no shortage of deal flow. Furthermore, each sector is large enough that neither has the volatility of other industries, such as tech or manufacturing. “Both healthcare and financial services are such big components of the economy, there’s really no good or bad time to invest in those industries,” Edwards said. “It’s like at GTCR, at certain times we’d invest in clinical labs and other times home healthcare was hot. You never have to say now is a good time or now is a bad time to invest.”

To round out the Flexpoint staff, Ethan Budin and Charles Glew, both formerly of GTCR, also joined Flexpoint, each as principals, and the firm is already in the hunt for its first deal.


Firm: Flexpoint Partners

Fund: Flexpoint Partners I LP

Target $150M

Amount Raised: $225M

Placement agent: None