Pomona Hires GE Pro To Run Co-Investments

Pomona Capital has been gearing up its co-investing business over the last few years, and it got off to a pretty good start. Its first co-investment was besides Clayton, Dubilier & Rice in Hertz Corp., a deal in which Pomona was able to recoup half its money within six months through a recapitalization.

Now the New York-based manager of secondary funds and funds of funds has made its latest move, hiring Lorraine Hliboki as partner and director, co-investments. Hliboki spent the last 15 years with General Electric as a senior managing director finding and structuring private equity transactions for the GE Equity division.

Landing Hliboki was a coup, since as a GE veteran she has a strong business-building background, as opposed to a transactional background, said Pomona Capital founder Michael Granoff. Her experience will come in handy in helping Pomona Capital pick the best portfolio companies to back.

Pomona Capital started business in 1994 as a secondaries investor, then branched into fund of funds. It owns partnership interests in more than 400 private equity funds, including ones managed by The Blackstone Group, Permira, Providence Equity Partners and Thomas H. Lee Partners. Granoff sees co-investments as the last piece of the puzzle in the firm’s business strategy. With secondaries, funds of funds and now co-investments, Pomona Capital “really covers all of the things you can do with funds,” he told Buyouts.

Pomona Capital seeks to co-invest $10 million to $15 million in transactions through its $150 million co-investment vehicle, Pomona ING Co-Investment, closed in 2006. Companies it has taken equity stakes in include Freescale Semiconductor, Harrah’s and Univision.

Besides the returns generated by co-investments, Pomona Capital also gets to learn a great deal about general partners by working with them on deals, said Granoff. “I think we’ve definitely learned things as a result of this process which would make us more or less likely to give people money,” he said.

In related news, Pomona Capital is nearly finished investing secondaries fund Pomona Capital VI, which it closed in 2005 at $821 million. The firm will likely be raising another fund in the latter part of this year. Based in New York City, Pomona Capital opened its London office in 1998. It has eight partners and six other investment professionals.—M.C.