By Shasha Dai
DOW JONES LBO WIRE
Bank-focused private equity firm Belvedere Capital Partners LLC
raised far less than expected for its most recent fund.
The fund originally targeted $500 million. It held a $44 million
closing in 2008 and is no longer in the market, said two people
familiar with the situation. The fund, originally named Belvedere
Capital Fund III LP, has been rebranded Belvedere Capital Fund II A
LP, as an annex fund to a predecessor partnership, said one
person.
Meanwhile, Managing Partner Alison Davis has stepped down from
day-to-day operations and won't be involved in deploying the new
fund, the people said.
Belvedere Chairman Richard Decker wasn't available for comment.
JoAnne Lauer, vice president of limited partner relations and
regulatory affairs, didn't return messages seeking comment.
San Francisco-based Belvedere first considered raising a new
fund in 2007, with plans to collect $100 million for an annex fund
for Belvedere Capital Fund II LP, a $150 million vehicle closed in
2006, said one person familiar with the matter. The plan changed in
2008, with Belvedere deciding to raise a standalone fund with a
$500 million target, this person said. "They thought there would be
opportunities post-Lehman to buy distressed banks."
But the fund came to market around the same time as other
bank-focused funds, raised by specialist firms like Castle Creek
Capital LLC and generalists like Carlyle Group and TPG Capital LP.
Also competing for limited partner dollars were blind pools of
capital being raised by such firms as Sageview Capital LP and
Blackstone Group LP.
"People had options, and if you show cracks in your portfolios,
they would turn elsewhere," said one person familiar with the
situation.
One such crack in Fund II's portfolio is Pink Sheets-listed bank
holding company SoCal Bancorp. The platform saw loan losses from
its primary subsidiary, Professional Business Bank, and it was in
default of a note after failing to raise capital to satisfy
regulatory requirements. Belvedere had to inject $12.6 million
fresh equity into Professional Business directly to keep it alive,
leaving SoCal's fate as a going concern unclear.
Belvedere has invested at least $37 million in SoCal from Fund
II. The $12.6 million new capital in Professional Business also
came from Fund II.
Another major change the firm has seen is the stepping back of
Davis, 48, a senior partner who played a key role deploying Fund
II.
As Decker reached his late 60s and early 70s, Davis received
greater day-to-day responsibilities, according one person familiar
with the firm. It couldn't be determined why Davis decided to scale
back, as she didn't return a message seeking comment.
Belvedere's backers include Bank of America Corp. (BAC), Cargill
Inc., Hillman Co., Miami Corp., Northwestern Mutual Life Insurance
Co., Old Republic Insurance Corp. (ORI), Phoenix Life Insurance
Co., Royal Bank of Canada (RY), Scotiabank Group and SunTrust
Equity Partners.
(Dow Jones LBO Wire covers news about private equity.)
-By Shasha Dai, Dow Jones LBO Wire; 212-416-2037;
shasha.dai@dowjones.com