Mellon Financial Corp. sold its Mellon Ventures portfolio to Goldman Sachs and Navigation Capital Partners, which is made up of five former partners of the VC unit, including group CEO Larry Mock, PE Week has learned.
The quintet quietly reformed as Navigation (which has no relation to a defunct boutique bank of the same name), an Atlanta-based private equity firm focused on growth capital and lower-middle-market manufacturing, distribution and services opportunities in the Southwest and Mid-Atlantic regions.
In addition to Mock, the Navigation team includes John Richardson (who headed Mellon Ventures’ growth and buyouts practice), Mark Downs, Eerik Giles and David Panton.
Navigation purchased Mellon Ventures’ direct investment portfolio, which included 34 companies at a cost basis of $250 million. The purchase price is unknown, in part because Navigation owes Mellon Financial a small cut of positive liquidity events.
Mellon is not paying Navigation any fees, however, except to cover legal bills related to one of the portfolio companies. Navigation has board seats or board observer rights on 22 of the 34 companies, and has capital for follow-on financing, if necessary. Mellon Ventures had invested $30 million in follow-on funding since direct investing was halted in 2004.
Goldman Sachs acquired Mellon Ventures’ indirect portfolio, which consists of limited partner positions in third-party venture capital and buyout funds. Goldman Sachs also paid for most of Navigation’s acquisition, and is now Navigation’s cornerstone limited partner (for its existing portfolio and for a new fund the firm is raising).
Navigation did not provide any details on a fund-raising target, save for that it will be well in excess of the $150 million to $200 million or so that lower-middle-market funds typically raise. Navigation is expected to issue an introductory press release later this month, and will become more transparent with the launch of a website once it closes the fund.
For now, it consists of the five partners plus one vice president, a CFO and an administrative assistant. In an interesting side-note, five of Navigation’s eight staffers are either African-American or female, which is unusual in the white male-dominated world of private equity. But that doesn’t, of course mean it’s minority-owned. The primary “shareholder” is Goldman Sachs. —Dan Primack