Independent sponsor Beaconhouse Capital Management targets distressed debt investing in the manufacturing space, particularly with companies that have filed for bankruptcy, according to Founder and Managing Partner Saquib Toor.
“We’re looking at special situation investors focused on the private markets. Either distressed, poorly managed or highly underutilized type situations,” Toor told Active LPs. “We find that area to be a lot less competitive than more traditional type deals.”
Toor worked for D.E Shaw & Co., JLL Partners and Knighthead Capital before founding Beaconhouse. His background in credit differentiates him from other investors who don’t have experience in distressed debt, an area that he said isn’t as competitive as other areas of private equity.
Founded in 2012, Beaconhouse Capital targets companies with revenues of more than $10 million, Ebitda of $3 million and is one of the biggest investors in its own deals, according to Toor.
“We commit, at a minimum, several hundreds of thousands of dollars of our own personal money to each deal,” he said.
Toor works alongside Principal Pavel Smyshlyaev who joined Beaconhouse Capital in 2012 after working as a vice president at Merrill Lynch for a year, and over two years at Viking Global Investors. Smyshlyaev is the CFO of TPG Plastics, which Beaconhouse acquired in 2018.
According to the company’s website, the Illinois-based firm invests in numerous sectors, including a strong focus on plastics, but also targets hospitality, industrials, retail and consumer products, transportation, business services and healthcare.
In 2016, the company acquired assets from agricultural bioscience company Metabolix Inc, which changed its name to Yield 10 Bioscience.
It also purchased plastics compounding company Alterra Holdings, which is run by Arash Kiani, who serves as CEO of the portfolio company and as an advisor at Beaconhouse Capital.
“We’re highly competent in manufacturing, more specifically anything related to plastics,” Toor said. “We have operating partners who’ve spent their lives in the plastics space.”
Beaconhouse Capital works closely with family offices as well as with an endowment for capital.
“Our investors are very supportive of our strategy,” Toor said. “If we need capital, we’re able to get it pretty quickly. We’re not in the market raising equity.”