Smaller-Firm Equity Investments ?Sweet Music? To New Halifax Capital?s Ears

RALEIGH/DURHAM, NC? Four finance/investment industry veterans have formed Halifax Capital Partners LP, a private investment venture. Eight months ago, managing director/partners James Lumsden, William Rogers, David Dupree and Billie Ellis Jr. dedicated their professional efforts to the proposition that funding small- and mid-cap companies across the country can translate into big business opportunities. Apparently, this refrain struck a responsive chord among investors…to the tune of a nine-figure commitment. According to Lumsden, a managing principal of Franklin Street/Fairview Capital, the new entity is already armed with $150 million earmarked for equity investments ranging between $10 million and $40 million in operating companies valued between $50 million and $250 million. Additionally, it is reported that the fledgling company expects to have some $250 million for investment commitments filling its coffers by year?s-end. ?We believe the small- and mid-cap markets are attractive as well as underserved,? noted Rogers, former top Robert M. Bass Group and KPMG Peat Marwick executive and a founding partner and principal of Colony Capital. However, Lumsden? formerly with Kidder, Peabody and Merrill Lynch Capital Markets as well as a co-founder of Fairview Capital? pointed out that Halifax would likely be more inclined to look at opportunities somewhat peripheral to the hospitality arena. These opportunities may be along the lines of connectivity and content for special hospitality industry web offerings, etc. In addition to concentrating on ?a part of the buy-out market [that it considers]underserved by financial intermediaries and capital markets,? the newly formed company is prepared to begin its business dealings with another ace up its organizational sleeve? operating independently but cooperatively out of several strategically positioned locations across the country. ?Adhering to a ?client-server? approach via regional deal-gathering locations in Los Angeles, Dallas/Fort Worth, Washington, D.C. and here in Raleigh/Durham, we expect to benefit by being thought of as ?local? to our various markets as well as being recognized as a legitimate national investor,? Lumsden said. ?To this end, we have created a ?virtual office? in real time through the use of WAN technology.? Further defining the new organization?s operating credo while addressing its expectations, Lumsden explained: ?Many private equity firms have ?outgrown? the smaller transaction market; a market on which we are 100% focused. Additionally, few firms of any [substantial]size operate away from the Northeast and northern California despite the fact that there is real growth opportunity in smaller transactions throughout the Southeast, the Midwest, the Southwest, the Mid-Atlantic region and Southern California.? Singing much the same praises of the equity-investment landscape are: fellow Fairview Capital co-founder Dupree, formerly a managing director and partner with The Carlyle Group in addition to affiliations with Montgomery Securities, Alex. Brown & Sons, and Johnston Lemon & Co.; and Ellis, a former director and chairman of the commercial and real estate law section of Kelly, Hart & Hallman. Investors in the fund, which will reportedly remain focused on theme-based opportunities in sectors with long-term growth characteristics experiencing temporary value dislocations due to economic cycles, regulatory issues or deal complexity, include public and private pension funds, corporate entities and individuals.