Grace Readies $100M Vehicle

Grace Venture Partners of Orlando is prepping an offering memorandum for its second private investment vehicle – tentatively dubbed Grace Hospitality LP. Although fund-raising will not begin until January, the firm has already pegged a final close of between $50 million and $100 million, slated for mid-2002.

The proposed fund is to carve out a stake in the hospitality, entertainment and restaurant concepts that come to life in tourism-rich Disney country, and then push those ventures out into the national marketplace. A restaurant concept, with five or 10 existing locations, might come looking to Grace Venture Partners for growth capital, said Steve Collins, a partner with the firm. The fund will initially invest between $2 million and $5 million in each portfolio company, and put smaller amounts to work in subsequent rounds.

Though the fund’s mission strays far from that of its technology-focused predecessor, last year’s $20 million Grave Venture Partners LP, the launch of the hospitality fund marks a return to the firm’s roots. Collins was formerly vice president for business development at Walt Disney Attractions, the segment that operates the ABC-owned entertainment giant’s theme parks and attractions. Firm founder and managing director Ned Grace is the founder of a Nasdaq-listed chain of steakhouses and is also the managing member of Grace Equity Partners LLC, the general partner in Grace Venture Partners LP.

It also marks the first time the firm will go out seeking institutional capital. Its predecessor was capitalized by Grace’s investment firm and individual investors.

Carolina Braunschweig can be contacted