This year’s fundraising season is only a few weeks old but has already seen offerings from several new private equity shops launched by veteran investors.
A prominent example is Banner Ridge Partners, established in 2019 by Anthony Cusano, the ex-head of Siguler Guff’s secondaries group, which last month secured $550 million for its debut fund.
Flying below the radar are emerging managers which are just now bringing funds to market. They include a San Francisco lower mid-market firm led by a former executive with HIG Capital.
In January, American Pacific Group filed a Form D fundraising document for its inaugural vehicle. The filing did not reference a target for American Pacific Group I, which has yet to secure commitments.
American Pacific was founded last year by Managing Partner Fraser Preston, previously an HIG senior managing director. Joining HIG in 2008, Preston focused on investing in business services, consumer products, and tech, media and telecom. In 2013, he went to San Francisco to help create HIG’s West Coast presence and undertake large-cap mid-market deals.
Preston participated in several major HIG deals, including the 2016 acquisition of Quicken, a personal money management software provider. Preston chaired Quicken, his LinkedIn profile shows. He also chaired Dent Wizard, sold in 2015 to Gridiron Capital; HelpSystems, sold in 2018 to HGGC; and Matrixx Initiatives, sold in 2018 to Gryphon Investors.
Over a nearly two-decade PE career, Preston led or played a leadership role in more than 15 platform investments, according to American Pacific’s website, representing more than $2.5 billion in acquired enterprise value.
American Pacific was set up to acquire mostly North American companies with EBITDA of up to $20 million. It will invest in complex deals, such as carve-outs and take-privates, involving opportunities in a range of sectors but with a focus on software and technology. The firm intends to bring on operating partners to support growth in the portfolio, its ADV filings show.
Other team members include Managing Director and COO Nick Wall, previously a director with Lazard’s private capital advisory group.
Another under-the-radar manager is Harkness Capital Partners, a New York lower mid-market firm. Harkness this month filed a Form D document for Harkness Capital Partners I, which adds to a 2019 filing. The fund collected $109 million from 26 investors against an undisclosed target.
Harkness was founded in 2015 by Partner Ted Dardani, formerly a partner with Oak Hill Capital Partners. Dardani joined Oak Hill in 2002 and helped lead investing in the firm’s business and financial services group.
Harkness invests in growth-oriented companies in business services verticals, typically with EBITDA of $5 million to $25 million. It has so far done two platform deals, backing Southwest Foodservice Excellence, a food services provider to K-12 public school districts, and Kane Is Able, a third-party logistics provider.
It is not clear if Harkness is raising a fully-fledged debut fund or capital for specific transactions. In 2017, the firm secured $25 million from nine investors for another vehicle, a filing shows, and led the PE consortium that backed Southwest Foodservice.
Harkness last year acquired a majority stake in Kane Is Able. According to Citizens Commercial Banking, which led asset-based financing for the deal, the investment was made through Harkness Capital Partners I.
American Pacific and Harkness did not respond to a request for comment on this story.
Action item: See American Pacific Group’s ADV filings here.