Lariat, launched by ex-KRG, RedCloud execs, is winding down

Lariat Partners, launched in 2013 by former executives from KRG Capital and RedCloud Capital, is winding down operations, sources told Buyouts.

Co-founder Jay Coughlon announced this week he is forming a new firm, Fruition Partners, with former Lariat Partner Jason Urband and former Lariat VP Mac Hampden.

It’s not clear what Lariat’s other co-founder, Kevin Mitchell, will do post-Lariat. Mitchell and Coughlon will share responsibility to manage out remaining investments in Lariat’s sole fund, which closed on $118 million in 2014, one of the sources said.

One limited partner said the split was not contentious. “They are splitting the firm in half. Kevin and Jay are going in their separate directions,” the source said.

The Denver-based firm likely would have had a difficult time raising a second fund considering the debut pool’s performance. Fund I generated a -8.4 percent internal rate of return and 0.77 total value to paid-in multiple as of June 2018, according to performance information from Ocean Avenue Capital Partners.

Lariat’s website shows that the firm has three companies remaining in its portfolio: Ecoserv, Northern Seed and Willowood USA. The deals were led by Mitchell, the website said.

The investments Coughlon led at Lariat have all been exited, according to Fruition’s announcement. Those were Jacent, sold to Gridiron Capital earlier this year; Offen Petroleum, sold to Court Square Capital in June, and Subsea Global, sold to GenNx360 Capital Partners last year.

Coughlon co-launched Lariat after spending 12 years at KRG Capital Partners. Mitchell previously worked as managing partner at independent sponsor RedCloud.

Fruition will operate without a fund, one of the sources said. The sponsor will target companies ranging in Ebitda from $2 million to $10 million. It’s not clear if Fruition will eventually raise a traditional private equity fund.

Action Item: Reach Jay Coughlon at jay@lariatpartners.net