At a time when many private equity firms are looking to slim down, Leeds Weld & Co. is trying to bulk up.
The New York-based investment firm, which recently grabbed outgoing Simon & Schuster CEO Jonathan Newcomb, is in the midst of raising its fourth investment vehicle. Named Leeds Weld Equity Partners IV, the fund is being pitched with a $500 million target capitalization and a $5 million minimum commitment. A first close is expected to occur sometime next quarter.
Not only is this the first time that Newcomb is participating in a private equity fund-raising drive, but it is also the maiden voyage for firm namesake William Weld. The former Massachusetts governor became a partner in Dec. 2000 when the firm was still investing from its $160 million third fund.
Today, however, new investment capital from that fund is nearly tapped out. Leeds Weld did recently manage to participate in an unannounced deal for Louisville, Ky.-based Franklin Career Services, but most future investments will likely come from LP commitments secured in the upcoming weeks.
The firm plans to maintain its dedication to the education and training sectors, and believes that a larger fund will provide greater flexibility. Last year, for example, Leeds Weld pumped approximately $40 million into a St. Kitts-based veterinary school named Ross University. That deal, which also involved J.W. Childs Associates, was far larger than most of the growth equity-type deals Leeds Weld had been limited to. It is also the type of deal the firm hopes to do more of in the future.
Jeffrey Leeds, founder and principal of Leeds Weld, declined to comment on the new fund for legal reasons. He did say, however, that the firm now has much more to offer both LPs and portfolio companies since Newcomb came aboard.
“John Newcomb has done 40 acquisitions as CEO of Simon & Schuster, so he has a skill set which is very much required in our business,” Leeds explains. “He also has very deep operational experience, which is something we really wanted more of here.”
Newcomb had previously acted as an operational advisor to Leeds Weld.
Education Sector Takes Hit
In related news, the education sector was unable to avoid last year’s slowdown in venture capital disbursements.
According to a report released last week by Boston-based research firm Eduventures, just $800 million of venture capital was invested into education-focused companies in 2001. That figure represents a 73% drop from the $2.9 billion disbursed in 2000.