Irving Place Capital
Encyclopedia
Irving Place Capital, formerly known as Bear Stearns Merchant Banking (BSMB), is a private equity
firm focused on leveraged buyout
and growth capital
investments in middle-market companies across a range of industries.
The firm's predecessor Bear Stearns Merchant Banking was founded in 1997 by John D. Howard
, formerly a co-founder of Vestar Capital Partners
. The group completed its separation from Bear Stearns
' owner JPMorgan Chase in 2008.
Irving Place Capital is based in New York City
its predecessor had raised approximately $4.4 billion since inception across three Bear Stearns Merchant Banking funds.
, restaurant
s, consumer products, healthcare, energy
, financial and business services
and industrial sectors. Among the firm's most notable investments are the following (separated by the private equity fund
from which the investment was made:
was hired by Bear Stearns
to launch a new private equity
and merchant banking effort for the investment bank. Prior to joining Bear Stearns, Howard had been senior vice president of Wesray Capital Corporation
and later co-founded Vestar Capital Partners
in 1988. In 1998, Bear Stearns Merchant Banking raised its first fund with $200 million of investor commitments. Bear Stearns had been one of the pioneers of private equity investing in the 1960s and 1970s, when Jerome Kohlberg
and later proteges Henry Kravis
and George Roberts
completed a series of what they described as "bootstrap" investments beginning in 1964-65 before leaving the bank to found Kohlberg Kravis Roberts in 1976.
In 2001, Bear Stearns Merchant Banking completed fundraising for its second fund with $1.5 billion of investor commitments including a $500 million commitment from Bear Stearns. The fundraising effort had begun 18 months earlier in 1999.
Bear Stearns Merchant Banking launched Bear Growth Capital Partners in 2003 to target smaller companies that fell below the investment parameters it had set for its main fund. Bear Growth Captital Partners made its investments from capital provided by Bear Stearns rather than an independent fund or drawing from BSMB's fund. Also in 2003, BSMB provided capital to a joint venture with Rudolph Giuliani's private equity firm, Giuliani Capital Partners to make investments in the security sector.
In 2006, Bear Stearns Merchant Banking raised its third fund with $2.7 billion of investor commitments.
In March 2008, Bear Stearns
, BSMB's parent, faced what was repored to be a potential liquidity crisis. Through the intervention of the Federal Reserve and other US Government agencies, Bear Stearns agreed to a sale of the company to JPMorgan Chase on March 24, 2008, which was completed on May 30, 2008. Following the closing of this transaction, Bear Stearns Merchant Banking became a subsidiary of JPMorgan Chase. In March 2008, when the meltdown of Bear Stearns began, the firm dropped the Bear Sterns Merchant Banking moniker and began calling itself BSMB to distance itself from the failed investment bank.
In June 2008, it was announced BSMB would spin out of J.P. Morgan. The bank already had its own private equity investment group One Equity Partners
, which had been acquired in the 2004 acquisition of Bank One. JPMorgan Chase had already decided to keep the One Equity Partners group over JPMorgan Partners (today CCMP Capital
), the legacy private equity investment group that had come from Chase Manhattan Bank
in the 2000 merger. was once again designated the exclusive private equity arm for the combined firm. As a result, it was clear that Bear Stearns Merchant Banking was not going to remain within the bank.
The Bear Stearns Merchant Banking team was one of several private equity groups within Bear Stearns Asset Management that was acquired by JPMorgan Chase. Other groups included:
On November 1, 2008, Bear Stearns Merchant Banking completed a spin out
from JPMorgan Chase to become Irving Place Capital.
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firm focused on leveraged buyout
Leveraged buyout
A leveraged buyout occurs when an investor, typically financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
and growth capital
Growth capital
Growth capital is a type of private equity investment, most often a minority investment, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business.Companies...
investments in middle-market companies across a range of industries.
The firm's predecessor Bear Stearns Merchant Banking was founded in 1997 by John D. Howard
John D. Howard
John D. Howard is CEO of Irving Place Capital and was Senior Managing Director of Bear Stearns. He is the manager of the $3 billion Bear Stearns Merchant Banking Fund III...
, formerly a co-founder of Vestar Capital Partners
Vestar Capital Partners
Vestar Capital Partners is an American private equity firm focusing on leveraged buyout transactions in the United States, Europe and Asia.The firm, which was founded in 1988 is headquartered in New York City with offices in Boston, Massachusetts, Denver, Colorado in the US as well as Paris, Milan,...
. The group completed its separation from Bear Stearns
Bear Stearns
The Bear Stearns Companies, Inc. based in New York City, was a global investment bank and securities trading and brokerage, until its sale to JPMorgan Chase in 2008 during the global financial crisis and recession...
' owner JPMorgan Chase in 2008.
Irving Place Capital is based in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
its predecessor had raised approximately $4.4 billion since inception across three Bear Stearns Merchant Banking funds.
Investments
Since inception, Irving Place Capital and its predecessor, Bear Stearns Merchant Banking has made a number of investments in notable companies in the retailRetail
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
, restaurant
Restaurant
A restaurant is an establishment which prepares and serves food and drink to customers in return for money. Meals are generally served and eaten on premises, but many restaurants also offer take-out and food delivery services...
s, consumer products, healthcare, energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
, financial and business services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
and industrial sectors. Among the firm's most notable investments are the following (separated by the private equity fund
Private equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....
from which the investment was made:
- Fund I - AéropostaleAéropostale (clothing)Aéropostale, Inc. is a mall-based, specialty retailer of casual apparel and accessories, principally targeting 14-to-17-year-old young women and men through its Aéropostale stores and 7-to-12-year-old kids through its P.S. from Aéropostale stores...
, Integrated Circuit Systems , NRT IncorporatedNRT IncorporatedNRT LLC is the largest residential real estate brokerage company in the United States of America. It is a subsidiary of Realogy Corporation. NRT's commercial operations rank as the twelfth largest corporate-owned commercial real estate brokerage in the country...
, Safety 1st , Standard HotelStandard HotelThe Standard Hotel brand is a part of Andre Balazs Properties. It is a group of four boutique hotels in Los Angeles , Miami and New York.- History :...
- Fund II - Balducci'sBalducci'sBalducci’s Food Lover’s Market is a specialty gourmet food retailer in the United States with six grocery stores. The company headquarters is in Parsippany, New Jersey.- History :...
, CamelBak GroupCamelBakCamelBak Products, LLC is an outdoors equipment company known primarily for its hydration products, such as hydration packs and water bottles. CamelBak is also a supplier of hydration packs, protective gear, and other products to the U.S. military and law enforcement agencies around the world.The...
, Churchill Financial, New York & CompanyNew York & CompanyNew York & Company, Inc. is a nationwide specialty retailer of women's fashion and accessories.Lerner Shops was founded in 1918 by Samuel A. Lerner and Harold M Lane in NYC. Also born to Samuel in 1918 was Alan Jay Lerner. New York & Company, Inc., its current name under new ownership, is an...
, Reddy IceReddy IceReddy Ice Holdings, Inc. is the largest packaged ice manufacturer in the United States, serving approximately 82,000 customer locations under the Reddy Ice brand name....
, Seven for All MankindSeven for all Mankind7 For All Mankind is a brand of designer jeans founded by Michael Glasser, Peter Koral, and Jerome Dahan in 2000 and headquartered in Los Angeles, California. Since 2007, it has been owned by the VF Corporation.7 for All Mankind began by designing women's jeans...
(jeans), Stuart WeitzmanStuart WeitzmanStuart A. Weitzman is the designer of the international, high-end shoe company, Stuart Weitzman.Stuart Weitzman's trademark use of unique materials , and his attention to detail, garnered him and his company a global following...
and Vitamin Shoppe.
- Fund III - Doral Financial CorporationDoral Financial CorporationThe Doral Financial Corporation is the holding company of Doral Bank.-Background:Doral Bank is a $10 billion-asset financial institution with 40 branches strategically located throughout Puerto Rico...
, PlayCore, Caribbean Financial Group, Ironshore, MC Shipping, Rimrock Energy, Universal Hospital Services, Dots, Chesapeake and Thermadyne Holdings.
1997 - 2008
In 1997, John D. HowardJohn D. Howard
John D. Howard is CEO of Irving Place Capital and was Senior Managing Director of Bear Stearns. He is the manager of the $3 billion Bear Stearns Merchant Banking Fund III...
was hired by Bear Stearns
Bear Stearns
The Bear Stearns Companies, Inc. based in New York City, was a global investment bank and securities trading and brokerage, until its sale to JPMorgan Chase in 2008 during the global financial crisis and recession...
to launch a new private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
and merchant banking effort for the investment bank. Prior to joining Bear Stearns, Howard had been senior vice president of Wesray Capital Corporation
Wesray Capital Corporation
Wesray Capital Corporation was an early private equity firm focussing on leveraged buyout investments. The firm was founded by former US Secretary of the Treasury William E...
and later co-founded Vestar Capital Partners
Vestar Capital Partners
Vestar Capital Partners is an American private equity firm focusing on leveraged buyout transactions in the United States, Europe and Asia.The firm, which was founded in 1988 is headquartered in New York City with offices in Boston, Massachusetts, Denver, Colorado in the US as well as Paris, Milan,...
in 1988. In 1998, Bear Stearns Merchant Banking raised its first fund with $200 million of investor commitments. Bear Stearns had been one of the pioneers of private equity investing in the 1960s and 1970s, when Jerome Kohlberg
Jerome Kohlberg, Jr.
Jerome Kohlberg, Jr. is an American businessman and early pioneer in the private equity and leveraged buyout industries founding private equity firm Kohlberg Kravis Roberts & Co. and later Kohlberg & Company....
and later proteges Henry Kravis
Henry Kravis
Henry R. Kravis is an American businessman and private equity investor. He is the co-founder of Kohlberg Kravis Roberts & Co., a private equity firm with over $62 billion in assets as of 2011. He has an estimated net worth of $3.7 billion as of September 2011, ranked by Forbes as the 88th richest...
and George Roberts
George R. Roberts
George R. Roberts is an American financier and was one of the three original partners of Kohlberg Kravis Roberts & Co. , which he co-founded alongside Jerome Kohlberg and first cousin Henry Kravis in 1976.-Biography:...
completed a series of what they described as "bootstrap" investments beginning in 1964-65 before leaving the bank to found Kohlberg Kravis Roberts in 1976.
In 2001, Bear Stearns Merchant Banking completed fundraising for its second fund with $1.5 billion of investor commitments including a $500 million commitment from Bear Stearns. The fundraising effort had begun 18 months earlier in 1999.
Bear Stearns Merchant Banking launched Bear Growth Capital Partners in 2003 to target smaller companies that fell below the investment parameters it had set for its main fund. Bear Growth Captital Partners made its investments from capital provided by Bear Stearns rather than an independent fund or drawing from BSMB's fund. Also in 2003, BSMB provided capital to a joint venture with Rudolph Giuliani's private equity firm, Giuliani Capital Partners to make investments in the security sector.
In 2006, Bear Stearns Merchant Banking raised its third fund with $2.7 billion of investor commitments.
The collapse of Bear Stearns in 2008
Bear Stearns
The Bear Stearns Companies, Inc. based in New York City, was a global investment bank and securities trading and brokerage, until its sale to JPMorgan Chase in 2008 during the global financial crisis and recession...
, BSMB's parent, faced what was repored to be a potential liquidity crisis. Through the intervention of the Federal Reserve and other US Government agencies, Bear Stearns agreed to a sale of the company to JPMorgan Chase on March 24, 2008, which was completed on May 30, 2008. Following the closing of this transaction, Bear Stearns Merchant Banking became a subsidiary of JPMorgan Chase. In March 2008, when the meltdown of Bear Stearns began, the firm dropped the Bear Sterns Merchant Banking moniker and began calling itself BSMB to distance itself from the failed investment bank.
In June 2008, it was announced BSMB would spin out of J.P. Morgan. The bank already had its own private equity investment group One Equity Partners
One Equity Partners
One Equity Partners is a private equity firm focused on leveraged buyout and growth capital investments in middle-market companies across a range of industries....
, which had been acquired in the 2004 acquisition of Bank One. JPMorgan Chase had already decided to keep the One Equity Partners group over JPMorgan Partners (today CCMP Capital
CCMP Capital
CCMP Capital is a private equity investment firm that focuses on leveraged buyout and growth capital transactions. Formerly known as JP Morgan Partners, the investment professionals of JP Morgan Partners separated from JPMorgan Chase on July 31, 2006. CCMP has invested approximately $12 billion...
), the legacy private equity investment group that had come from Chase Manhattan Bank
Chase Manhattan Bank
JPMorgan Chase Bank, N.A., doing business as Chase, is a national bank that constitutes the consumer and commercial banking subsidiary of financial services firm JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with J.P. Morgan & Co. in 2000...
in the 2000 merger. was once again designated the exclusive private equity arm for the combined firm. As a result, it was clear that Bear Stearns Merchant Banking was not going to remain within the bank.
The Bear Stearns Merchant Banking team was one of several private equity groups within Bear Stearns Asset Management that was acquired by JPMorgan Chase. Other groups included:
- Bear Growth Capital Partners, a growth capitalGrowth capitalGrowth capital is a type of private equity investment, most often a minority investment, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business.Companies...
investment group founded in 2003 with a $375 million commitment from Bear Stearns. J.P. Morgan hired CCMP CapitalCCMP CapitalCCMP Capital is a private equity investment firm that focuses on leveraged buyout and growth capital transactions. Formerly known as JP Morgan Partners, the investment professionals of JP Morgan Partners separated from JPMorgan Chase on July 31, 2006. CCMP has invested approximately $12 billion...
to manage the legacy fund - Bear Stearns Private Equity Ltd., renamed J.P. Morgan Private Equity Limited , a publicly traded private equityPublicly traded private equityPublicly traded private equity refers to an investment firm or investment vehicle, which makes investments conforming to one of the various private equity strategies, and is listed on a public stock exchange.There are fundamentally two separate opportunities that private equity firms...
vehicle making fund of fundsFund of fundsA "fund of funds" is an investment strategy of holding a portfolio of other investment funds rather than investing directly in shares, bonds or other securities. This type of investing is often referred to as multi-manager investment...
and secondary investmentsPrivate equity secondary marketIn finance, the private equity secondary market refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds.... - Bear Stearns Health Innoventures, a venture capital fund established to invest in early- to mid-stage health care focused companies with a focus on the biotechnology sector
- Constellation Ventures a venture capital group, founded in 1998, making investments in the mediaMass mediaMass media refers collectively to all media technologies which are intended to reach a large audience via mass communication. Broadcast media transmit their information electronically and comprise of television, film and radio, movies, CDs, DVDs and some other gadgets like cameras or video consoles...
, communications, software and services sectors Constellation, which was rebranded Constellation Growth Capital in May 2009, was spun out and subsequently entered into a joint venture with Highbridge Capital Management.
On November 1, 2008, Bear Stearns Merchant Banking completed a spin out
Spin out
A spin-out, also known as a spin-off or a starburst, refers to a type of corporate action where a company "splits off" sections of itself as a separate business....
from JPMorgan Chase to become Irving Place Capital.
External links
- Irving Place Capital (company website)