* Could double in size over next 12 months
* Hires former executive director of Fifth Street Finance
* Geared to help LPs solve problems with private equity portfolios
Robert Rakowski, 45, joined Davis, Calif.-based Upwelling Capital Group LLC on Sept. 30, having most recently served as executive director at lender Fifth Street Finance, where he was a portfolio manager with responsibility for corporate restructurings. Before that Rakowski spent eight years at turnaround consulting shop AlixPartners, where as a strategic consultant he advised on such projects as the winding-down of a Wall Street brokerage firm with a $1 billion-plus alternatives management business.
His hiring is part of a growth spurt for Upwelling Capital, which Mark said could well double in size over the next 12 months from five full-time employees today, with the exact size hinging on its business development efforts. The firm, whose clients include the Overseas Private Investment Corp and the California Clean Energy Fund, seeks to hire employees at every level, from analysts to executives with board-level experience. It is interested in people skilled in portfolio due diligence, portfolio monitoring, direct investments and fund restructuring; it is also looking for experience in emerging markets.
Rakowski, a CPA who for now works from his home office in Simsbury, Conn., beefing up the firm’s East Coast presence, said that his role involves both pitching the firm’s services to potential clients, as well as leading the execution of assignments once won. Upwelling Capital provides a variety of advisory and asset management services to LPs facing thorny problems such as how to prune a private equity portfolio that has grown too unwieldy to manage effectively, and how to deal with an underperforming general partner with little hope of raising a new fund. The firm can also review investment strategies, evaluate investment opportunities, and monitor and manage portfolios down to the underlying asset level.
Upwelling Capital appears to have found a ready audience, so far attracting upwards of 10 institutional investors around the world as clients, almost all with assets under management exceeding $150 million, Mark said. The opportunity—especially to advise LPs and GPs on troubled partnerships—has not been lost on other young firms. As reported this month by Buyouts, Hycroft recently formed in New York City with four founding partners to advise both LPs and GPs on a variety of transactions, including restructurings. Meanwhile, a new joint venture, Kirchner-Crestline Private Equity Group, based in Fort Worth, Texas, recently formed to buy and manage private equity assets from troubled firms.
Mark said there’s a real “void in the market” for advisers to help individual LPs figure out what to do with, in some cases, hundreds of millions if not billions of dollars worth of underperforming assets. “The LP community is more and more focused on (the question): What do we do with all these assets?” Mark said. “Coming up with the right answer for what to do is critical.”