KeyCorp Spin-Out Makes Progress With First Independent Fund

The firm formed in June 2011 when the investment and finance teams at Key Principal Partners, the private equity affiliate of KeyCorp, resigned to form an independent firm. They pointed to the Dodd-Frank financial reform law, which limits banks ability to invest in and run private equity funds. 

“Because of Dodd-Frank, it became increasingly complex to be associated with a bank,” Leland Lewis, a managing partner with Cyprium Partners, told blog affiliate peHUB at the time of the spin-out in 2011.

The firm typically invests $10 million to $60 million via subordinated debt, preferred stock, common equity, and warrants, options and other equity participation rights, according to its Web site. It typically backs companies generating sales of $30 million to $250 million in manufacturing, distribution or service-oriented industries.

It’s unclear exactly how much the firm is seeking to raise for the fund, Cyprium Investors IV. The principals raised $500 million for their most recent fund, KPP Investors III, in 2007, though KeyCorp was its largest investor. Still, Lewis told peHUB in the same report that the target “will be similar to past funds.”

Cyprium Partners has about 17 investment professionals, 14 of which are based in Cleveland; the other three, including Lewis, are based in New York.

Lewis and Chairman John Sinnenberg, who is based in Cleveland, did not immediately respond to a call seeking comment.