Pritzkers join DeVoses in raising outside money for direct investments

  • Why is this important: Two prominent family offices are raising outside capital for co-investments

The Pritzker family has made a splash lately by raising its first pool of capital from outside investors. Read our story. But it’s hardly the first Midwest family to raise money from other families for direct investments.

Ottawa Avenue Private Capital LLC, the investment arm of the DeVos family — U.S. Secretary of Education Betsy DeVos is a prominent member — has raised at least $640 million for a series of three co-investment funds, according to an SEC Form ADV.

The 2018 edition of the Ottawa Avenue co-investment fund has taken in $153 million to date from 14 investors, the Form ADV showed. The 2017 fund raised $274 million from 10 investors, while the 2016 fund raised $213 million from six investors.

All told Ottawa Avenue Private Capital has $6.32 billion under management from 66 high-net-worth individuals. All in, the company has $7.38 billion in discretionary and nondiscretionary assets under management, its recent Form ADV said. Read our in-depth story on Ottawa.

It is unclear exactly what co-investment strategy the Ottawa Avenue funds follow. The company did not return messages seeking comment.

But the list of assets in the public financial disclosure report of Betsy DeVos, signed earlier in 2017 as part of her confirmation as education secretary, includes interests in a number of PE funds.

Ottawa Avenue Private Capital’s Form ADV also may provide some clues, noting that the firm invests in PE funds and co-invests in PE investment opportunities and other traditional and alternative assets.

The DeVos family patriarch, Richard DeVos, co-founded Amway in 1959 with Jay Van Andel. The family now manages the company. RDV Corp is the family office of the DeVos family and includes the family’s various foundations.

The fundraise by Pritzker-backed PPC Partners outstrips that of Ottawa Avenue Private Capital, having closed on a $1.8 billion fund. Almost $750 million was committed by the various Pritzker family trusts.

The PPC fund gives investors an opportunity to co-invest in middle-market companies with enterprise values of $100 million to $750 million and EBITDA exceeding $15 million.

PPC will receive a 1.5 percent management fee and carried interest of 20 percent.

PPC has already closed an investment in C.H. Guenther & Son, a family-owned producer of dry and frozen-grain food products for private labels. Read our story here.

The Pritzkers are one of the wealthiest families in the U.S., with a net worth of $29 billion as of June 2016, Forbes reported.

Interestingly, both the DeVos and Pritzker families have histories of public service.

Dick DeVos ran for governor of Michigan in 2006 and lost. Penny Pritzker was U.S. secretary of commerce under President Barack Obama, and J.B. Pritzker has thrown his hat in the ring for governor of Illinois.