Hefty CAZ commitment puts Grafine’s debut fund within reach of target

Grafine Partners took a giant step closer to its debut offering’s $500 million target with a large allocation from CAZ Investments, sources told Buyouts.

Asset manager CAZ is expected to soon announce a $200 million commitment to Grafine Capital Fund I, sources said, increasing capital raised to more than $400 million.

Grafine has also amassed $125 million in separately managed accounts, sources said, bringing the total pool to north of $525 million. The firm declined to comment.

Grafine was launched in 2019 by Elizabeth Weymouth, a one-time Riverstone Holdings partner, with an innovative strategy. Taking its cue from the Great Resignation – the en masse departure of employees from their jobs spurred by the covid-19 pandemic – Grafine focuses on seasoned GPs leaving careers at well-established private equity shops to start their own outfits.

As such, Grafine operates something like a multi-faceted GP stakes vehicle. It takes a flexible approach to seeding emerging managers across private markets, including by acquiring minority interests, and supporting them as they grow and institutionalize.

At the same time, Grafine creates opportunities for investors to gain direct access to new firms with fresh strategies run by top dealmakers. Especially for LPs with scanty in-house resources, this provides a means of making co-investments outside of traditional fee-based structures.

In today’s slow fundraising market, cash-poor LPs are reserving their limited capital for incumbent GPs. This is relevant to Grafine – on the road with Fund I since 2021 – and other first-timers, which even in periods of robust capital raising face barriers to getting the attention of investors.

For some emerging managers that have struggled in this environment, news of Grafine approaching a final close will be welcome.

Grafine has already begun partnering with select GPs. This year, it anchored the debut fund of The Newcastle Network, led by ex-L Catterton managing director Chris Casgar, sources told Buyouts. Featuring a strategy of investing in mid-market consumer products and services companies, Newcastle is targeting $200 million.

Earlier, Grafine invested in Stanley Capital, a European mid-market private equity firm created by former Ardian, Centerbridge Partners and Goldman Sachs executives. It also invested in Ascendant Capital Partners, an opportunistic real estate firm led by Russell Gimelstob, previously with Dune Real Estate Partners.

CAZ was founded in 2001 by chairman and CIO Christopher Zook with a pool from Texas families. It sources thematic opportunities for its own and third-party investing, including as an acquirer of minority stakes in private market GPs. Managers backed by CAZ include Blue Owl Capital, Clearlake Capital Group, Silver Lake, Veritas Capital and Vista Equity Partners.

Another Grafine backer is RedBird Capital Partners, a private equity firm led by Goldman Sachs veteran Gerry Cardinale.

Weymouth was with Riverstone for 10 years, heading investor relations and capital partnering. Profiled for Buyouts’ Women in PE, the class of 2023, she oversees a New York team that includes senior strategic partner Ken Hersh, ex-CEO of NGP Energy Capital Management, and partner Luis Enriquez, a former senior partner with McKinsey & Company.