Less than five months after the U.S. team of
“This is the same strategy we followed at Standard Life and, before that, at State Street,” says Dan Cahill, co-founder and managing partner at Andover, Mass.-based Constitution Capital. “It’s a lot of heavy lifting because there are one thousand or more firms in the middle markets, but you can generate very strong returns if you do your homework.”
Constitution Capital’s team has previously made fund commitments with such firms as Avista Capital Partners, Eos Partners, New Mountain Capital, The Sterling Group, Sterling Investment Partners, Sterling Partners, Sun Capital Partners and Towerbrook Capital Partners.
Cahill would not disclose the target for Constitution Capital’s debut fund, although he expects a first close in early summer. The firm does not plan to use partner capital to make interim investments.
The Constitution Capital team includes Cahill, Managing Partner John Guinee, Partner Robert Hatch, Partner Vincente Miguel Ramos, Partner William Richardson and Principal Alexander Tatum.
The six members formed the U.S. team of U.K.-based Standard Life Investments, the money-management arm of the British insurer. The six left in October after being shut out of the firm’s partnership economics.
The partners say that the parent company, Standard Life, agreed to partially spin the team out into an independent firm called SL Capital by selling a 40% ownership stake to nine managers. None of those managers, however, was part of Standard Life Investments’s Boston-based team. At the time, that office managed a $300 million fund of funds geared to North American firms.
Instead, Standard Life offered equity stakes to all the managers based in Edinburgh, Scotland, whose office oversaw a $1.4 billion European fund of funds.
Cahill says that he and his Boston-based team complained about being left out of the new venture, and decided then to leave.
In the initial aftermath of their departures, Standard Life Investments denied that the team had departed; the company continued to take voice mails and kept the partners’ profiles up on its website. When their departures came to light, a Standard Life Investments spokesman claimed that the loss of the team was not significant because the group had not assumed deal-sourcing, marketing or fund-raising functions. Those allegations turned out to be false, and the spokesman later retracted them.
Constitution Capital also plans to add a pair of senior professionals, as well as some junior staff. —Dan Primack