New Heritage Capital Returns To Roots, Raises $120M Fund

Heritage Partners faced the failure of its 1999 vehicle, $843 million Heritage Fund III, when the firm diverged from its earlier strategy of taking significant minority stakes in family-owned businesses, and delved into large LBOs. Heritage Fund III lost $19.6 million as of Dec. 31, 2012, according to the Washington State Investment Board.

By 2007, co-founders Michel Reichert and Michael Gilligan had departed the firm, leaving Peter Hermann and Jrolf at the helm.

Jrolf is now listed as managing general partner of Boston-based New Heritage Capital. His biography on the firm’s website said he founded New Heritage Capital in 2006 after spending ten years with Heritage Partners. Hermann retired in 2008, according to a person familiar with the firm.

UPDATE: New Heritage Capital launched its fundraising effort in September with a target of $175 million, according to a source. The firm has held its first close for New Heritage Capital Fund.

Team members at New Heritage Capital include two Heritage Partners veterans, Charles Gifford Jr. and Nickie Norris, now general partners at the new firm. Other New Heritage Capital executives include Melissa Barry and Judson Samuels, both principals; Scott Rajkowski, vice president, and Tristan Velez, vice president of finance.

It appears Jrolf may be steering New Heritage back to the roots of Heritage Partners by focusing on entrepreneurial companies controlled by founders and families. New Heritage is seeking companies with a minimum enterprise value and revenue of $30 million and a minimum EBITDA of $5 million, according to the firm’s website. Areas of interest include aerospace, business services, consumer products, distribution, education, food and beverage, healthcare, manufacturing, pet products, specialty chemicals and testing.

The firm has already made investments in ProTransport-1, a medical transportation company, and Reach Air Medical Services, a provider of emergency air medical services, as well as Centra Industries, a manufacturer of aerostructure components, and OneSource Distributors, an electrical parts distribution company.

New Heritage Capital filed two Form Ds. New Heritage Capital Fund LP listed a total offering amount of $92.5 million from 11 investors and a total amount sold of the same dollar amount. New Heritage Capital Fund-B LP lists an offering amount of $27.8 million from seven investors and total amount sold of the same sum.

UPDATE: This story has een updated with additional details about the firm’s fundraising.