- Why this is important: many family offices like to avoid blind pool funds but also lack the resources to diligence investments.
Middlemarch Partners has added Alex Kim and Andrew Marquardt as partners as it seeks to fill out a unique niche in the LP space, providing investment banking to companies and access for family offices to co-invest with private equity firms.
Middlemarch was founded by Sasha Grutman and Demetris Papademetriou. Grutman was a vice president at Goldman Sachs and a managing director at Citigroup Strategic Investments, while Papademetriou has previously worked for Knight Capital Group, Cashedge, JP Morgan and Swiss Re Capital Partners.
In an interview with Buyouts, Grutman said Middlemarch has two lines of business: investment banking and principal investing. He compared Middlemarch’s model to some of the oldest modern banks that used to invest in the deals they helped companies finance.
“Not only do we provide investment banking [and] transaction support to raise capital for companies and support M&A and sales of companies…but because the two founders of the firm spent a very material part of their careers in private equity as investors, we like to co-invest in deals that we bank,” Grutman said. “The reason that we started Middlemarch is because companies valued that investment perspective from their banker…that we go to market thinking, partially, ‘Would we invest in this company?’”
Middlemarch then takes these investment opportunities and offers them to its LPs, including smaller family offices and ultra-high net worth investors, as an opportunity to gain “back-door access” to quality deals without having to enter a blind pool fund.
“We don’t offer it as a fund, we offer it as an individual investment opportunity,” Grutman said. “We’re allowing you to rely on us to serve as your general partner, and we’re doing it for multiple families at once.”
Middlemarch usually takes part in venture and growth equity transactions ranging from $5 million to $20 million, the firm told Buyouts.
Middlemarch focuses mostly on financial services and business services. Grutman told Buyouts that they have worked on deals in private equity, private debt, alternative finance and technology-enabled transaction processing, among others. Middlemarch also set up its own fund trading in gold. A May 30 federal filing shows they have about $17 million in assets under management in their private capital division, Middlemarch Capital Partners.
Kim joined Middlemarch this week after collaborating with them for six months. He will coordinate its Asia investments from Hong Kong as the firm enters into investment relationships with Asia-based family offices and companies. Kim previously worked with McKinsey and Company, First Analysis Venture Capital and DLJ.
Marquardt joined in May. His focus is on emerging technology deals as well as “interfacing with the bank community.” He previously held executive positions at BlackRock and Evercore Partners.
Grutman said the firm may be adding another partner in Europe in the near future.
“We’re really trying to make sure that we’re well-positioned to help family offices both in the U.S. gain access to deal flow abroad, but also enable us to bring foreign family offices and foreign deals to our U.S.-based investors,” he said.
Action item: contact Sasha Grutman at email@example.com.