IBJNews

Local private equity firm unveils $316M investment fund

Back to TopCommentsE-mailPrintBookmark and Share

The state’s largest private equity firm has finished raising $316 million for its biggest investment fund to date, company officials told IBJ on Wednesday.

Hammond Kennedy Whitney & Co., based in Indianapolis with an office in New York, finalized its latest investment pool on March 31.

Dubbed HKW Capital Partners IV, the fund follows in the footsteps of the firm's $255 million round that ended in late 2007. That fund went toward acquiring 14 companies. An earlier $100 million fund also acquired 14 companies.

With the latest fund, HKW is following its historic strategy of acquiring controlling interests in North American companies in the energy services, infrastructure and medical products industries. It is targeting those sectors because they all have growth projections that well exceed forecasts for the broader economy, said Chairman Glenn Scolnik.

Key drivers for medical products include aging Baby Boomers and their growing demand for health care, Scolnik said. On the energy side, horizontal drilling and North America’s push for energy independence have created openings for support services in which the equity firm invests.

Eighty-one percent of investors in HKW Capital Partners IV were institutional entities, the firm said. That included six insurance companies, four fund-of-funds, two state pension funds, one private-university endowment and a handful of individuals. HKW did not disclose the other investors.

One of the fund-of-funds was AlpInvest Partners, which invested with money it manages for the Indiana Public Retirement System pension fund.

HKW describes its acquisition focus as “lower middle-market companies.” The firm generally invests in companies that report between $20 million and $200 million in annual revenue and $5 million to $30 million in earnings before interest, taxes, depreciation and amortization.

Among other requisites, the firm says it looks for “honest and talented management teams," low risk of “technological obsolescence,” and defined growth plans showing sustainability.

Companies must indicate significant growth ahead of them. Owning most of the market share could hurt odds of getting an investment from the firm, because that means there may be little room to grow.

“We’ve passed on a lot of companies that were wonderful companies that didn’t have any prospects for growth,” Scolnik said.

The age of a company doesn’t directly factor into HKW’s investment decisions, said partner Jim Snyder. But the firm steers away from startups and groups that could burn through cash.

“We want companies that have a history of profitability,” Snyder said.

The firm usually spends four to five years building capital for a fund, Scolnik said, and maintains its stakes in individual companies four to five years before divesting.

HKW began investing money from the new fund in November 2012 to acquire a stake in Brant Instore Corp., a Canadian business that offers screen and digital printing, and distribution.

Since then, HKW has invested in three others: Mobile Tech Inc. in Oregon, Specialized Desanders Inc. in Alberta, Canada, and EnerSafe Inc. in Texas.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. why oh why does this state continue to elect these people....do you wonder how much was graft out of the 3.8 billion?

  2. i too think this is a great idea. I think the vision and need is there as well. But also agree with Wendy that there may be better location in our city to fulfill this vision and help grow the sports of hockey and figure skating in Indy. Also to help further develop other parts of the city that seem often forgotten. Any of the other 6 townships out side of the three northernmost could benefit greatly from a facility and a vision like this. For a vision that sounds philanthropic, the location is appears more about the money. Would really like to see it elsewhere, but still wish the development the best of luck, as we can always use more ice in the city. As for the Ice growth when they return, if schedules can be coordinated with the Fuel, what could be better than to have high level hockey available to go see every weekend of the season? Good luck with the development and the return of the Ice.

  3. How many parking spaces do they have at Ironworks? Will residents have reserved spaces or will they have to troll for a space among the people that are there at Ruth Chris & Sangiovese?

  4. You do not get speeding ticket first time you speed and this is not first time Mr.Page has speed. One act should not define a man and this one act won't. He got off with a slap on the wrist. I agree with judge no person was injured by his actions. The state was robbed of money by paying too much rent for a building and that money could have been used for social services. The Page family maybe "generous" with their money but for most part all of it is dirty money that he obtained for sources that are not on the upright. Page is the kind of lawyer that gives lawyers a bad name. He paid off this judge like he has many other tine and walked away. Does he still have his license. I believe so. Hire him to get you confiscated drug money back. He will. It will cost you.

  5. I remain amazed at the level of expertise of the average Internet Television Executive. Obviously they have all the answers and know the business inside and out.

ADVERTISEMENT