NEW YORK, Feb 19 (Buyouts Magazine) - Alvarez & Marsal
Capital Partners, a Greenwich, Connecticut-based buyout shop
closely aligned with restructuring shop Alvarez & Marsal, has
beaten the $500 million target on its debut fund with a $600
A&M Capital Partners LP closed on Jan 31 after a fundraise
dating back to late 2010, the year the firm was founded,
according to Michael Odrich, global head of the firm and
previously managing director and head of private equity at
After holding a $174 million first close in November 2012,
and after it began doing its first deals, the firm started to
gain momentum with investors, to the point where in the end it
had more demand for the fund than it could accommodate.
"The market has improved quite a bit as investors have
gotten more liquidity back," said Odrich of the last 12 months
Two of the anchor investors in the fund are GoldPoint
Partners, a subsidiary of New York Life Insurance Company that
committed $75 million, and Oregon Investment Council, which
committed $100 million.
Buyouts earlier reported that both received discounted
economic terms. Oregon Investment Council, for example,
negotiated a 1 percent management fee, 10 percent carried
interest and 100 percent offset of transaction fees.
Other investors in the fund, whose terms were otherwise the
conventional '2 and 20' and 8 percent preferred return, include
Neuberger Berman, Dominion Resources ($50 million commitment)
and the Texas Permanent School Fund, Odrich told Buyouts.
Over $60 million for the fund came from members of the
investment team and some 220 senior professionals at Alvarez &
Materials presented at a Dec. 5, 2012 meeting of the Oregon
Investment Council noted that senior professionals of Alvarez &
Marsal would be entitled to 30 percent of the fund's carried
interest for deal sourcing and related services. Placement
agents for the fund were Barclays Capital and Evercore Partners.
Alvarez & Marsal Capital plans to invest $20 million to $75
million at a time -- it can go far higher if need be -- to take
control positions in mid-sized companies with enterprise values
of $75 million to $750 million, according to its website.
Expect at least 80 percent of the capital to be deployed in
North America, and up to 20 percent in European Union countries,
Odrich said. Main sectors of interest include industrial,
consumer products, retail, business services and healthcare,
while the firm will also consider financial services and energy.
Although Alvarez & Marsal is known as a turnaround
consultant, its associated buyout shop isn't searching for
highly distressed companies as a rule, said Odrich.
Instead, the firm is looking for underperformers that can
benefit from an operational overhaul, that are going through
management changes or are in need of capital to fund growth or
It plans to pursue corporate carve-outs as well as
consolidation strategies. According to Odrich, the firm has
access to the more than 2,000 professionals at Alvarez & Marsal,
who can bring their expertise to bear in deal sourcing, due
diligence and improving the performance of portfolio companies.
"There's nothing like it in the market," said Odrich of the
fund and its resources. "That's what got me excited about
joining and getting behind this business."
Alvarez & Marsal Capital lists nine professionals on its
website, including Odrich; Jack McCarthy Jr, managing director,
and Kurtis J. Kaull, managing director. Michael Bardorf is the
chief financial officer.
Two portfolio companies listed on the site are Gabriel
Brothers, a chain of deep discount stores, and Atlantic City
Linen Supply, a provider of commercial laundry services.