Irving Place Capital
|Founded||1997 (2008 as Irving Place)|
|Founder(s)||John D. Howard|
|Headquarters||New York, New York, United States|
|Products||Leveraged buyout, Growth capital|
|Total assets||$4.4 billion|
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.
Since inception, Irving Place Capital and its predecessor, Bear Stearns Merchant Banking has made a number of investments in notable companies in the retail, restaurants, 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:
- Fund I - Aéropostale, Integrated Circuit Systems (NASDAQ: ICST), NRT Incorporated, Safety 1st (NASDAQ: SAFT), Standard Hotel
- Fund II - Balducci's, CamelBak Group, Churchill Financial, New York & Company, Reddy Ice, Seven for All Mankind (jeans), Stuart Weitzman and Vitamin Shoppe.
- Fund III - Doral Financial Corporation, PlayCore, Caribbean Financial Group, Ironshore, MC Shipping, Rimrock Energy, Universal Hospital Services, Dots, Chesapeake and Thermadyne Holdings.
1997 - 2008
In 1997, John D. Howard 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 protégés 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.
|History of private equity
and venture capital
|(Origins of modern private equity)|
|(Leveraged buyout boom)|
|(Leveraged buyout and the venture capital bubble)|
|(Dot-com bubble to the credit crunch)|
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 Capital 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.
The collapse of Bear Stearns in 2008
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:
- Bear Growth Capital Partners, a growth capital investment group founded in 2003 with a $375 million commitment from Bear Stearns. J.P. Morgan hired CCMP Capital to manage the legacy fund
- Bear Stearns Private Equity Ltd., renamed J.P. Morgan Private Equity Limited (LSE: JPEL), a publicly traded private equity vehicle making fund of funds and secondary investments
- 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 media, 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.
- Bear Stearns Tries on Shoes. Business Week, June 29, 2005
- Bear, Stearns Unit Is Said To Buy Vitamin Shoppe. New York Times, December 2, 2002
- Bear Stearns Merchant Banking Announces Acquisition of PlayCore Holdings Market Wire, February, 2007]
- MC Shipping Inc. Shareholders Approve Merger with Affiliate of Bear Stearns Merchant Banking. Business Wire, September 05, 2007
- Universal Hospital Services, Inc. Completes Acquisition by Bear Stearns Merchant Banking. Business Wire, June 4, 2007
- Irving Place Capital acquires women's apparel retailer Dots. Crain's Cleveland Business, January 4, 2011
- Irving Place, Oaktree Buy Chesapeake. May 05, 2009
- Irving Place to Buy Thermadyne for $200 Million. New York Times, October 6, 2010
- Bear Stearns closes $1.5 billion investment fund. National Real Estate Investor, May 2, 2001
- A Bear Stearns Banking Fund. New York Times, November 5, 1999
- Bear Stearns Merchant Banking Launches "Bear Growth Capital Partners". Business Wire, August 7, 2003
- Lattanzio to lead new Bear Stearns middle-market private equity group. AltAssets, August 8, 2003
- US Bear Stearns to launch private equity fund with Rudolph Giuliani. AltAssets, July 31, 2003
- '08 Candidacy Could Shake Up Giuliani's Firm. New York Times, January 7, 2007
- BSMB closes latest fund on $2.7bn. AltAssets, August 3, 2006
- Recommendation for Investment in Bear Stearns Merchant Banking Partners III, L.P.. PSERS Private Equity Investment Program
- BSMB is Now Irving Place. Private Equity Professional Digest, October 29, 2008
- Bear Stearns Merchant Banking: Bloodied, not destroyed. The Deal, March 20, 2008
- Bear Merchant Banking Continues To Do Deals. Reuters Buyouts, March 31, 2008
- Bear Buyout Arm Ready to Fly Solo: BSMB to Split Off In Tale of Survival; First Up: New Name. Wall Street Journal, June 5, 2008
- http://blogs.wsj.com/deals/2008/03/18/what-happens-to-bear-stearns-merchant-banking-arm/ What Happens to Bear Stearns Merchant Banking arm. Wall Street Journal: Deal Journal, March 18, 2008
- What now for Bear Stearns' PE, VC affiliates?. The Deal, March 17, 2008
- Growth Capital Partners’ Paul Lattanzio finds gold in hidden places — and isn’t afraid to hold onto it. Dealmaker May/June 2007 , Page 62
- PE Week Wire: Tuesday, December 16, 2008. Reuters, December 16, 2008
- Bear Stearns Private Equity Limited Changes Name to J.P. Morgan Private Equity Limited. Press Release. J.P. Morgan Private Equity Limited (company website)
- Bear Stearns Health Innoventures Closes $212 Million Fund. Business Wire, April 26, 2001
- Constellation Ventures (company website)
- New Life, New Fund for Constellation Ventures. PE Hub, May 5, 2009
- Bear Stearns Merchant Banking rebrands . Private Equity Online, October 28, 2008
- Irving Place Capital (company website)