The common complaint when it comes to placement agents is that they’ll only take on fundraising assignments when it serves them, and usually that means there needs to be in excess of $150 million of capital being raised. Who can blame them? For a large agency with multiple advisors, the 2% commission most charge needs to be applied to something substantive in order to be worthwhile. Ultimately, that leaves buyout shops that are looking for less either out in the cold or pressured to seek out more capital than they can comfortably put to work.
Daniel Levinson wants to fill the gap. The former BerchWood Partners exec has recently launched Pine Ridge Advisors LLC, a one-man shop that because of its low overhead will be able to take on assignments below most agencies’ minimum threshold. “I’ll be targeting fund sizes anywhere from $150 million to $600 million, where the sponsors are looking to incrementally raise anywhere from $40 million to $150 million of fresh capital,” he said.
He added that every situation would be on a “tailored basis” depending on the needs of each individual client. The agency will take on as little as just the up-front work and the product placement of a fund or Pine Ridge could cover everything, soup to nuts, from the product placement to the full fund-marketing effort.
“In the past I’ve noticed a lot of funds, buyout funds in particular, that may have been launching a Roman numeral III or IV fund and had historically done their fundraising in house,” Levinson said. “They’d have a good institutional client base, with a number of re-ups, but they’d need a little help in either putting together the marketing materials or in reaching out to raise some incremental capital. They didn’t need the services of a full blown placement agent… but just a little help opening some doors.”
Levinson is currently talking to a number of groups that fit that mold, although he has yet to procure any clients. He said he is seeing a lot of interest from funds coming from the lower end of the middle market.
Levinson had joined BerchWood in 2001, and while there he most recently worked on funds from Close Brothers and DW Healthcare Partners, both of which closed last year.