Octavian & Company launched a fund geared toward investing alongside top private equity firms on a deal-by-deal basis.
“We have strong and long-standing relationships with a lot of large private equity funds, and they wanted to partner on the proprietary transactions we were developing,” Octavian chief executive officer Richard Hurowitz told Buyouts via email.
“This was true pre-covid and has only accelerated over the past few months. At the same time, we wanted a platform of family office partners that had a strong interest in investing in our transactions.”
The vehicle is a hybrid, Hurowitz told Buyouts, “perhaps most similar to a holding company, which is funded by our shareholders.”
A consortium of three family offices currently invests in Octavian. The company sources and develops deals on its own, then partners with a private equity firm to actually execute them.
Each deal will be run out of a special purpose vehicle, or SPV, in conjunction with the PE firm, which provides operational and administrative infrastructure as well as due diligence and eliminates some execution risk. The advantages flow both ways, Hurowitz said.
“Partnering with Octavian enables private equity funds to do deals outside of an auction process,” Hurowitz wrote. “And on the flip side, a structure like ours creates an opportunity to allow family office capital to invest directly in high-quality private equity deals.”
The family offices invested in the company will also usually be able to invest more capital directly in deals as they see fit.
Hurowitz said he is in discussions with a few more family offices, which could expand its investor base.
The idea for the vehicle came through discussions Hurowitz had with top private equity firms about the deals he was sourcing. “It really developed organically,” he wrote.
The company has a wide swath of industries in its sights, including media, consumer products, infrastructure and transportation. The company is mostly interested in making control investments, but will also look at rescue financings. Its control investments will take the form of traditional buyouts or control investments in distressed companies.
Before launching this vehicle, Hurowitz ran the hedge fund Octavian Advisors. Its funds were sold to TPG in 2013, according to a press release. Before that, he worked for Halcyon Asset Management, another hedge fund. Hurowitz is also the writer and publisher of The Octavian Report, a quarterly magazine.
Action Item: check out Octavian & Company’s website here.
CORRECTION: This story has been updated to correct the spelling of Richard Hurowitz’s name in paragraph 6.