Ottawa Avenue Private Capital LLC, an investment arm of the family office of Richard DeVos, father-in-law to U.S. Secretary of Education Betsy DeVos, has raised at least $420 million for two funds in a series of annual co-investment pools, regulatory filings suggest.
The Grand Rapids, Michigan, firm, founded in 2015, had assets in Ottawa Avenue Fund 2017 LP valued at $250 million as of March, according to a Form ADV. A predecessor fund had assets valued at $170 million. Form D filings associated with the funds list Jerry Tubergen as president and CEO and Robert Schierbeek as COO, treasurer and secretary. According to a Bloomberg profile, the two executives have comparable roles at the family office. Investors in the fund had to make minimum commitments of $20 million.
Although modest in scope, the money-raising effort — principally from rich investors — is notable for revealing details on the broader private equity activities of RDV Corp, the family office of Richard DeVos, a co-founder of direct sales giant Amway, and of his wife, Helen, and their family. The roughly 35-employee Ottawa Avenue Private Capital discloses those details in a Form ADV brochure filed this March — a requirement of its registration as an investment adviser with the U.S. SEC.
The details also help explain why Grand Rapids has become a more important hub for private equity in recent years. Earlier this month I reported on two startup PE firms based in Grand Rapids, Consensus Capital Holdings and Auxo Investment Partners, with plans to raise money from wealthy families. It is unclear whether Consensus Capital has a relationship with Ottawa Avenue Private Capital; a source familiar with Auxo Investment Partners said the firm has not done deals with or raised money from the DeVos family.
From the Form ADV we know that Ottawa Avenue Private Capital has discretion over $6.3 billion in assets. This includes investments in private equity funds, PE co-investments, credit funds and secondary funds, as well as investments in “other traditional and alternative asset classes.” The filing doesn’t list any specific investments.
However, the list of assets in the public financial disclosure report of Betsy DeVos, signed earlier this year as part of her confirmation as education secretary, includes interests in a number of PE funds. Among them are AEA Investors 2006 Fund LP, AEA Europe Fund LP, Apollo Investment Fund IV LP, Beecken Petty O’Keefe QP Fund II LP, Cortec Group Fund IV LP, Industrial Growth Partners III LP, Northstar Mezzanine Partners III LP, Northstar Seidler Mezzanine Partners II LP, Partners Group Secondary 2011 LP, Roundtable Healthcare Partners LP (and II and III), Snow Phipps II LP, Veritas Capital Fund III LP, Vista Equity Partners Fund V LP, and Wind Point Partners VI (and VII-A).
Other facts noted in the Form ADV:
- Since 1991 the investment team, consisting of some 15 people, had been managing investments in private equity and other illiquid asset classes for the family, as well as for related trusts, foundations and family-office employees.
- The investment team formed Ottawa Avenue Private Capital in 2015 to manage outside money, including through a series of annual co-investment funds. The funds are designed to be invested side by side with family money.
- The firm charges the co-investment funds both an asset-based management fee and carried interest once predetermined performance hurdles have been met. It shares 100 percent of transaction fees, monitoring and related fees with investors.
Ginny Seyferth, founder and president of SeyferthPR, which handles public relations for the DeVos family office, declined to comment further on the PE activities of Ottawa Avenue Private Capital for this column, citing “the requirements of the federal securities laws.”
Family patriarch Richard DeVos co-founded Amway in 1959 with a friend, Jay Van Andel; DeVos retired in 1993, according to Forbes, and the company is run by his children. Richard and his wife, Helen, founded the Richard and Helen DeVos Family Foundation (part of RDV Corp) around 1969; and each of their four children later began running their own foundation, including the Dick and Betsy DeVos Foundation.
In covering the confirmation hearings of Betsy DeVos earlier this year, the Washington Post reported that RDV Corp had “extensive financial holdings” in real estate, telecommunications and online charter schools. The newspaper pointed to one company in particular that could pose a conflict of interest: Performant Financial Corp, a debt-collection agency that does significant business with the Education Department. DeVos agreed to divest her interest in that company as well as 101 other entities within 90 days of her confirmation, according to a Bloombergarticle, which pegged the net worth of her and her husband at about $890 million.
I was unable to learn whether Betsy DeVos divested her interests in any of the PE funds listed on her financial disclosure form. According to that form, she served as a director of RDV Corp from January 1998 through November 2016.
Action Item: Looking for a primary commitment from the DeVos family, or maybe you have a co-investment opportunity to show them? The phone number listed on the Form D is +1 616-454-4114.
Photo: U.S. Education Secretary Betsy DeVos speaks at the Conservative Political Action Conference at National Harbor, Maryland, U.S., February 22, 2018. REUTERS/Kevin Lamarque