Minority ownership is the driving strategy behind ICV Capital Partners.
The New York-based private equity firm, which is 51% minority-owned, focuses on businesses that are owned by minorities or provide products or services to minorities. Willie Woods, managing partner, who owns 51% of the year-old firm with managing partner Taurus Richardson, said that ICV's other focus is businesses that operate in or hire from inner city markets.
Mr. Richardson noted that the inner city market needs capital, but ICV, which has $130 million in assets, is being extremely cautious about making investments. "We expect to look at as many as 300 pitches a year, but want to do only one or two deals a year, so that we don't lose any money for our partners," he said.
The firm so far has committed $15.1 million to acquire Sterling Foods Inc., producer of baked products for military and commercial markets. "Sterli ng had many of the things we look for in a company," Mr. Woods said. "It has grown rapidly in the last five years, adding more than 150 workers. And in a tight labor market, it has been proactively recruiting from low- to moderate-income communities in San Antonio."
ICV will invest only in businesses with annual revenues of $25 million to $150 million and cash flow of at least $5 million. "When we come in we will help a company grow revenues, refine strategies, hire more management and provide a lot of help, along with capital," said Mr. Richardson.
While ICV is new, its partners have important connections through their previous jobs, which helped them raise their first fund. Mr. Woods was a vice president in investment banking at Deutsche Bank Alex. Brown, while Mr. Richardson was an investment professional at Joseph Littlejohn & Levy Inc.
Investors in the fund include the $146 billion California Public Employees' Retirement System; $112 billion New York State Common Retirement Fund; $9.8 billion State Universities Retirement System of Illinois; $2 billion Massachusetts Bay Transportation Authority Retirement Fund; and $309 million FB Heron Foundation.