HC Private Investments (HCPI) and family office Landon Capital Partners teamed up to make it easier for emerging managers to fund their deals with their platform Evolution Managers Capital.
Evolution will provide up to $50 million to private equity managers who target the lower-middle market to help them close their respective deals, said Chris Sullivan, managing partner at the Boston-based Landon Capital Partners. HCPI and Landon Capital Partners expect roughly three-to-five deals to be completed with each $50 million allocation.
The partnership also will help support a new firm’s back office, leaving the job of finding and executing on deals to the managers, according to HCPI Managing Partner Matthew Moran. He added that the $50 million does not go toward back-office support.
“We do expect the deal teams to come on the platform to be somewhat self-sufficient, in terms of doing diligence and digging into a business,” he said. HCPI Managing Partner Moran said that he, alongside HCPI partner John Kelly and Sullivan, created the platform to “really harness the energy of the investment professionals in the private equity space.”
Both firms already work with family offices and high net worth individuals, which will be able to potentially find new opportunities through the Evolution platform, Sullivan said.
Both Landon Capital and HC Private Investments invest in the lower middle market, with the Chicago-based HCPI specifically targeting the consumer and industrial and manufacturing industries.
Emerging managers using the platform won’t be limited to investing in specific sectors, both Moran and Sullivan told Buyouts.
“We’d like to build a diverse pool of strategies across a broad range of industries in order to provide those on our platform with a breadth and depth of strategic and sector expertise. It’s a deal by deal basis,” Sullivan said.
Evolution Managers Capital is looking to deploy at least $500 million into the lower middle market, Sullivan said in a press release.
“For us, it’s about selecting the right managers and making sure we spend time vetting them and understanding their strategy and empowering them to go off and have the success as direct investment professionals,” Sullivan said.
Evolution Managers Capital is the latest seeding platform to provide capital to new managers. Alaska Permanent Fund, The Wafra Group and UK Railways Pension Scheme created a program to invest $1 billion with six private equity firms, Buyouts reported. Sixpoint Partners also launched its seed fund, SP Capital Partners, in 2018, according to PE HUB.
Action Item: Reach Chris Sullivan at 617-589-3652