The Sun Rises On Solaia Capital Advisors

For Michael Carrazza, the time is now. The co-founder and managing director of Bard Capital Group LLC, a fundless sponsor specializing in the middle market, is ready to launch his first institutional fund of committed capital. And he plans to do so under the newly minted banner of Solaia Capital Advisors.

Carrazza is still putting the finishing touches on his plan for raising the fund, which for now has a target range of between $150 million and $600 million. He’s focused on assembling a blue-chip roster of operating professionals who will retool Solaia’s portfolio companies. He said he has no doubt that his timing is optimal given the dislocated market conditions. “We’ve been selective and avoided the temptation to invest at the top of the cycle,” Carrazza said.

Solaia will keep its focus on mature mid-market businesses whose retiring entrepreneurs or management teams are seeking liquidity, a succession plan, or capital to grow. “We work very well in these situations, and paired with our hands-on operations guidance, you have a very successful formula,” Carrazza said.

Solaia will operate as an affiliate of Bard Capital, which Carrazza created in 2002 with Richard Bard, the firm’s chairman and CEO. The two men will continue to collaborate, with Carrazza working on Bard Capital’s portfolio companies and Bard lending his operating expertise to Solaia’s acquisitions. But Bard, 60, lives in Colorado and is looking for a less hectic pace, whereas Carrazza, 42, is based in New York and has no plans to slow down.

The pair created Bard Capital as a fundless buyout shop so they could pursue only the deals they were passionate about. Instead of raising a fund that would require them to deploy capital across 10 or 12 portfolio companies at the top of the market, they preferred to apply an operational focus to properties in a slimmer portfolio.

Bard Capital has three portfolio companies and counts one exit so far. In 2003, the firm acquired its first company, Wheelabrator Group, which manufactures surface preparation solutions for the aerospace, automotive, medical and transportation industries. Bard Capital exited the company in 2006, after increasing EBITDA from $7 million to $30 million in 30 months, according to Carrazza. The IRR was 34 percent, he added.

Carrazza said he knows raising a first-time fund will be challenging, with limited partners looking for a track record of deals and exits. While raising money has not been difficult for Bard Capital’s one-off deals, Carrazza said he found the process distracting. In June 2007, Bard Capital completed the $320 million buyout of Amquip Corp., one of the largest crane rental businesses in the United States, and Carrazza said raising the money for that deal was exhausting given that he had to assemble capital while simultaneously negotiating a complex transaction. “After going through that for 10 months, 7 days a week, sometimes 20 hours a day without a breath, I’m not sure that I’d live through it again,” he said.

The new fund would provide Carrazza with a platform to scale out his team. Carrazza has attracted advisers to Solaia such as long-time mentor and former Deutsche Bank President and CEO John Rolls, former Nasdaq Vice Chairman David Weild IV, and a cadre of industry operating executives.

The name Solaia, which in Italian means a sunny place, has a lot of meaning to Carrazza. It is the name of his polo team and one of his favorite Italian wines. He designed the firm’s logo, a square featuring one-quarter of a grooved circle that combines a machine gear, a castle turret and the sun, symbolizing operational capability, strength and a new day.—J.P.