Snow Phipps, Fresh Fund In Hand, To Hire Operating Partners

Firm: Snow Phipps Group LLC

Fund: Snow Phipps II LP

Target: $700 million

Amount Raised: $844 million

Placement Agent: Credit Suisse

Fresh off its final close for its second fund, Snow Phipps Group is in the process of evaluating new sectors to target and hiring new operating professionals to help it source and execute deals, CEO Ian Snow told Buyouts.

The New York-based buyout firm closed the fund, Snow Phipps II LP, with $844 million in commitments, handily surpassing both its target of $700 million and the $620 million in commitments the firm collected for its debut fund, which closed in 2007. The firm charges the industry standard 2 percent management fee and 20 percent on carried interest.

Snow Phipps relies heavily on eight operating partners—typically former executives in a given industry—to help it find and execute deals and manage new companies.

The eight sectors the firm targets are specialty franchising; specialty chemicals and industrial processes; business services; apparel and retail; transportation and infrastructure materials; financial services; government services/IT services; and industrial components. Its operating partners include Leif Soderberg, a former senior vice president and chief strategy officer for Motorola Inc., who heads up the government services/IT services effort; and Jim Amos, the former CEO of Mail Boxes Etc., who leads specialty franchising.

Snow said it was premature to discuss in what areas the firm hopes to expand, but said the firm would likely add two to three operating partners over the next several years, suggesting that the firm, which has about 20 investment professionals, could be targeting 11 sectors in a few years. “We target eight sectors, and we’re very focused within those,” said Snow, who is former Treasury Secretary John Snow’s son. “We are also always evaluating new potential industries that may be attractive for investment.”

Snow Phipps also appears poised to bring a lot of companies to the market, considering it still holds eight of the nine companies in which it invested with Fund I. Among the older investments still in the portfolio are FiberVisions Corp., a Duluth, Ga.-based manufacturer of fibers used in consumer and industrial products bought in 2006; EnviroFinance Group LLC, an investor, developer and manager of redevelopment projects in the U.S., which Snow Phipps first invested in in 2006; and low-fat frozen dessert maker Tasti D-Lite LLC, in which Snow Phipps first invested in 2007.

Snow said the firm is not actively shopping any companies, though it is often approached by potential buyers.

A former investment professional at Ripplewood Holdings LLC, Snow launched the firm in 2005 with Ogden Phipps II, who had been a founding partner and president of Guggenheim Merchant Banking, the private equity arm of Guggenheim Capital LLC.