New – Century Park Holds First Close on Fund I –

Century Park Capital Partners, an investment fund affiliated with investment bank Houlihan Lokey Howard & Zurkin, held an initial close of $106 million last month on its debut fund, which carries a target of $200 million.

Martin Sarafa, co-managing partner at Century Park, said that both he and Martin Jelenco began fund-raising efforts in January 1999 and had commitments in place by June. He said that the limited partners involved include a mix of financial institutions, banks, insurance companies, university endowments and some wealthy investors. Mellon Ventures is the lead investor in the fund. Century Park, based in L.A., employs the traditional 80%/20% carried interest split with an 8% hurdle rate.

“We will be investing in middle-market transactions between $5 million and $15 million,” Sarafa said. “Our investment strategy will range in the forms of buyouts, growth financing, recapitalizations, and Employee Stock Ownership Plan (ESOP) transactions, which happens to be a particular area of expertise of ours.”

Sarafa also said that the firm has a particular interest in recapitalization transactions where the existing owner continues on with a partial interest in the business that is either a minority or controlling level in the business.

“We’re also particularly interested in management-led buyouts and backing management teams,” he said. He added that the firm can do both control and non-control deals.

The fund will focus primarily on domestic investments although it does have the ability to do limited international investments. Sarafa said that the fund will invest in a broad range of industries.

“There are a few areas of particular interest we are looking at, including logistics and fulfillments, packaging, plastic injection molding of proprietary products, telecom infrastructure and network integration, specialty chemicals and components of services that serve the high-tech sector,” he said.

Sarafa said that the fund is currently engaged in a deal in the fitness sector but declined to give further details on the transaction. He also added that the fund generally targets a 30% gross return but expects to do better than that. The final close of the fund is scheduled for June 30.

Sarafa previously served as principal at Churchill ESOP & Capital Partners, which was a joint venture of Houlihan Lokey and Churchill Capital and was founding partner of that partnership. He was also managing director at Houlihan Lokey for about four and one-half years and was a part of a team that invested approximately $150 million of capital into a number of different middle market deals.

Houlihan Lokey Howard & Zurkin is an international investment banking firm that is based in Los Angeles, Calif.