John Lowden said goodbye to the bright lights and big city that he experienced for 16 years as a partner at New York City-based The Jordan Co. and hello to the suburban Greenwich, Conn. confines of his new firm: NewCastle Partners LLC.
Lowden, the new company?s founder and chief executive, said he made the switch because he wanted to do something in his hometown of Greenwich. With virtually no commute, Lowden can spend more time on the things that are most important to him, his family and making deals on his own terms. “I wanted to move back to doing lower-end transactions,” he said.
“[The] financial markets are turbulent, which makes it a great time to set something up. I am not missing any action because nothing is really happening,” he said.
The Jordan Co., which has been around for a little over 25 years, has more than 20 companies in its portfolio, with combined sales in excess of $4 billion. The New York-based VC also has over $1 billion in its new fund, JZ Equity Partners PLC.
While the company?s figures seem impressive, Lowden no longer wants to deal with such big numbers. He said he will continue to use most of Jordan?s philosophies but just with smaller companies. He claims that the VC market has created pressure for companies to invest in the bigger deals rather than the ones with the greatest value opportunities. “Transactions are in the six-figure range. [Jordan] is at a point where it will invest $100 million to $200 million in a deal. Some smaller deals have better value and gives a VC a chance to really put his experience to work.”
NewCastle is still in the development phase, but Lowden hopes it will be investing somewhere between $20 million and $40 million in first round deals.
Although Lowden is clearly changing pace, he is not totally through with Jordan. He will keep his board seats at the portfolio companies he worked with. Additionally, he expects Jordan and NewCastle to work together on deals in the future, even though NewCastle will invest a small fraction compared to the veteran VC.
The small amount of money NewCastle will invest is not going to come from a fund, however. “What I envision is a fundless fund that may develop into a pledge fund,” Lowden said. He plans on creating equity with pension funds, hedge funds and the help of insurance companies. Lowden added that he currently has some money and soft pledges from LPs that he worked with while at Jordan.
Lowden plans on finding deals the way he always has, through an extensive network of finders and brokers. NewCastle doesn?t plan to favor any geographic region but plans to invest in the industrial sector or what Lowden refers to as “Old Economy-type companies.”
For now, the new firm is a one-man show but Lowden hopes to bring in five or six partners. He said he will be spending the next couple of months taking care of administrative matters and looking into the deals that might be worthy of the firm?s modest investments. Lowden is already looking into three deals, including a valve manufacturer, a building product distributor and a plumbing fixture business.
Contact Danielle Fugazy: Danielle.Fugazy@tfn.com