Gauge Capital closes maiden fund at $250 mln hard cap

Firm: Gauge Capital LLC

Fund: Gauge Fund LP

Target: $175 mln ($250 mln hard cap)

Amount raised: $250 mln

Placement agent: Harken Capital Securities LLC

Fund adviser: Ropes & Ray LLC

The firm, which launched the fund this April, beat its target of $175 million and closed at its self-imposed cap of $250 million in September, according to Don Nelson, co-founder and managing director at Harken Capital, the placement agent on the fund. The general partner is the largest investor in the fund, said Nelson, describing the partners as “principal investors” in the fund although declining to provide a specific figure.

Nelson said he and co-founder Frederick Malloy of Harken Capital also invested in the fund. “We pick our clients with our dollars,” said Nelson. The firm only represents clients that the founders also invest with. “That’s our litmus test,” he said. Executives at Gauge Capital were not immediately available for comment.

Gauge Capital plans to invest $10 million to $40 million of equity at a time in eight to 10 portfolio companies as part of buyouts, consolidations, recapitalizations, growth investments and related transactions. The firm invests anywhere in North America, although it favors targets closer to home; companies it buys are likely to be generating anywhere from $5 million to $50 million in EBITDA.

Managing Partners Drew Johnson and Tom McKelvey co-founded Gauge Capital in 2013. Johnson was previously co-founder and managing partner at mid-market private equity shop CIC Partners where he invested in the food and health care markets. McKelvey previously was an advisor to technology and services-focused private equity firm Symphony Technology Group.

One of the first portfolio companies of the debut fund is Origami Owl, a seller of custom jewelry that Gauge Capital originally invested in as a fundless sponsor.