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Max’d Out: Max Capital Founders Part Ways –

There will soon be two more buyout shops fighting for LP dollars.

Max Capital Founders Russ Greenberg and Shail Sheth have decided to part ways and start their own buyout shops. While both parties agree the split is amicable, both Greenberg and Sheth said the timing is right to disband.

“Russ and I have different ideas on how to build the next fund, and it seemed reasonable to split at this time,” said Sheth.

“We need to take advantage of larger deals in the lower middle-market sector,” said Greenberg. “We have a difference in investment philosophy.”

As they did while partners at Max Capital, Greenberg and Sheth will co-manage the six companies that remain part of the Max Capital’s portfolio. “The plan is to try to exit one per year,” said Sheth.

Even though Max Capital’s founders have parted ways, there still remains the task of investing the remaining $15 million of the firm’s $60 million. According to Greenberg and Sheth, while none of the $15 million is earmarked for specific uses, both he and Sheth will collaborate on how and when to invest the capital in the companies remaining in the Max Capital portfolio.

Greenberg is now the managing partner of the newly formed Altus Capital Partners. Joining him from Max Capital will be brother Greg Greenberg, a partner based in Chicago; Elizabeth Burgess, recently promoted from vice president to partner; and Alicia D’Anna, who served as controller at Max Capital and will hold the same position at Altus.

Aligning with Sheth at Buckingham Capital will be Partner Albert Naggar and Associate Jason Schauer. A fourth employee, Tom Mistler, will join Buckingham as well. Mistler is the former CEO of ESCO Holding, which Max Capital sold to Zodiac S.A. in November 2002 (see Buyouts, 11/18/2002). Sheth says Buckingham is planning more hires and will hire a placement agent to locate personnel “with investment and operations experience.”

Regardless of what they label as philosophical differences,’ plans for fund raising at Altus and Buckingham have many similarities. Both firms are already laying the groundwork for inaugural funds, both funds have initial targets of $150 million, both firms will focus on acquisitions in the industrial sector in the eastern U.S. and both will focus on the low end of the middle market, in the $15 million to $100 million range.