Independent sponsor Allied Industrial Partners targets debut fund

A Houston-based independent sponsor that has built a portfolio of platform investments is raising its debut fund, a time-tested strategy that generally gets the attention of potential investors.

Allied Industrial Partners, formed in 2019, is targeting $300 million for its first fund, according to sources with knowledge of the firm.

The firm is among a group of first-timers testing the challenging fundraising markets with their initial commingled products. Emerging managers employ various strategies to attract capital from LPs, including operating on a deal-by-deal basis for a period of years to build an independent track record.

Emerging manager fundraising has dropped in the tough market environment, and yet certain newer shops are finding success in raising capital. First-time funds globally raised around $6 billion in the first quarter of 2023, compared to $67 billion for all of 2022, according to Buyouts data.

AIP employs a buy-and-build strategy across various segments, including industrial services; waste management and environment services; critical infrastructure; power and utilities; distribution; and manufacturing. It looks for companies with EBITDA of $5 million to $25 million.

The firm has built a portfolio of five platform investments: CES Power; Waste Eliminator; Wall Recycling; Mat Tech Industrial Services; and Dovetail Infrastructure Services. The firm had around $319.4 million in assets under management as of July, according to its Form ADV.

The firm was founded by Bradford Rossi and Philip Wright, both managing partners. Ross formerly was a partner and co-head of M&A at Sole Source Capital – itself an emerging manager. He also worked as a PE partner at Kirkland & Ellis and is a US Army veteran.

Wright was a founder and executive at Gravity Oilfield Services. They are joined by managing directors Alex Rich, a former CFO with CES Power and Waste Eliminator, and Gerald Smith, former head of corporate development at Enerflex.

Another firm that has been operating on a deal-by-deal basis for several years and that is out raising its first fund is MFG Partners. The firm is targeting in the range of $300 million to $350 million and was expected to officially hit the market in the first quarter, Buyouts previously reported.

Other emerging managers with new funds include Astira Capital, formed last year by Azra Kanji, a former partner at Abry Partners. Astira closed its debut fund on $675 million last year. Interlock Equity, established by ex-RLH executives, closed its maiden fund on more than $390 million.

Check out Buyouts’ extensive database of emerging managers, including first-time funds, with funds in the market here.