HGGC

Last updated
HGGC, LLC
Company type Private
Industry Private equity
Founded2007
Headquarters Palo Alto, CA
Key people
Rich Lawson, Steve Young, Harv Barenz, Les Brown, David Chung, Bill Conrad, Steve Leistner, Lance Taylor, and Neil White [1]
Total assets $6.8 billion [2] [3] [4] [5]
Website www.hggc.com

HGGC, LLC is an American middle-market private equity firm based in Palo Alto, California, with over $7 billion of cumulative capital commitments. [6] Since its inception in 2007, HGGC has completed transactions with an aggregate transaction value of $50 billion. [6] The firm was named 2014 M&A Mid-Market Private Equity Firm of the Year by Mergers & Acquisitions magazine. [7]

Contents

HGGC is led by private equity executive Rich Lawson, who is CEO, NFL Hall of Fame quarterback Steve Young, Harv Barenz, Les Brown, David Chung, Bill Conrad, Steve Leistner, Lance Taylor and Neil White. [1]

History

HGGC was originally co-founded as H&G Capital Partners by Messrs. Benson, Lawson and Young alongside Jon M. Huntsman and Robert C. Gay. Prior to co-founding H&G Capital Partners, Huntsman founded Huntsman Chemical Corporation, the largest manufacturer of polystyrene in the United States. Gay was a long-time Bain Capital managing director, who gained additional prominence due to his connection to former Bain Capital alumnus and presidential candidate Mitt Romney. [8]

Shortly after launching as H&G Capital Partners, the firm was sued in 2008 by H.I.G. Capital, which argued that the H&G name would cause confusion with H.I.G. in the marketplace. H&G Capital Partners agreed to change its name to Huntsman Gay Global Capital in recognition of two of its most senior founding partners. [9]

Gay, who had served as CEO of Huntsman Gay Global Capital since inception, accepted a calling in March 2012 to serve full-time as a general authority of the Church of Jesus Christ of Latter-day Saints. [10] Following Gay's departure, Gary Crittenden assumed the role of CEO at Huntsman Gay Global Capital. A year later, in 2013, Huntsman Gay Global Capital rebranded itself once again to the simpler HGGC, along with making some top management changes. Lawson became CEO, taking over from Crittenden, who became chairman. [10] [11]

In August 2021, it was reported that the company had a minority stake in the hair extension product company Beauty Industry Group (BIG). [12] In November 2021, it was reported that HGGC had purchased a majority stake in Grand Fitness Partners, a franchisee with 42 Planet Fitness clubs. [13] Also in November 2021, it was reported that HGGC and investment firm Snapdragon Capital Partners invested $240 million in online supplement dispensary firm Fullscript. [14] As of July 2022, the company's portfolio also included automotive industry data-mining company AutoAlert, vitamin and supplement business Better Being, and property-management software firm Entrata. [6]

Investment strategy

HGGC makes leveraged buyout, recapitalization and growth equity investments in middle market companies. [15] HGGC looks to invest in companies involved in updating end markets that are still steeped in outdated technology, including grocery stores, car dealerships, marketing agencies and insurance providers. [16]

Technology, in and of itself, is invading every end market, and it is driving companies to be more competitive than their peers," says Rich Lawson, CEO of HGGC. "What's changed is the proliferation of a computer in everyone's pocket. There's a much more sophisticated end-user base, and that is driving change in how businesses will have to compete." [16]

"We're looking for business people using technology to disrupt or drive change in their respective industries," says Les Brown, Managing Director and COO of HGGC. [17]

HGGC invests across a range of industry sectors, including tech and tech-enabled services, business services, financial services, consumer and industrials. HGGC's investing focus is typically on middle-market companies that have $100 million to $1 billion in annual revenues. HGGC primarily focuses on North American investments, although not exclusively. [8]

Funds and investments

Fund I ($1.1 billion)

HGGC's debut fund (Fund I) held a first close in March 2008 and a final close in March 2009. Fund I received $1.1 billion of investor commitments, ahead of its original $1 billion target. [2] In May 2008, CalPERS made a $180 million commitment to this initial private equity fund. [18] [19]

Fund II ($1.3 billion)

HGGC's second fund (Fund II) held a first close in March 2014 and a final close in March 2015. Fund II received $1.3 billion of investor commitments, surpassing a $1 billion target and reaching a $1.25 billion voluntary hard cap, which excluded the firm's GP commitment of $80 million. Notable investors in HGGC Fund II include PKA-AIP of Copenhagen, Denmark, which committed $125 million and OPTrust of Toronto, Canada. [3] [4] [5] Other investors in Fund II include Swedish public pension AP Fonden 3, Pennsylvania Public School Employees' Retirement System (PSERS), British public pension West Yorkshire Pension Fund, Belgian investment firm Brederode SA and French insurer CNP Assurances. [15]

Fund III ($1.8 billion)

HGGC's third flagship fund (Fund III) launched on September 6, 2016, and held a final close on December 14, 2016, which represented only 99 days in market. Fund III received $1.84 billion of investor commitments, surpassing a $1.5 billion target and reaching a $1.75 billion voluntary hard cap, which excluded the firm's GP commitment of approximately $85 million. [16]

Fund IV ($2.54 billion)

HGGC's fourth fund (Fund IV) closed in June 2022 at $2.54 billion, after being targeted at $2.25 billion. [1]

Investments

Early Fund II investment transactions include AutoAlert, which provides cloud-based data and analytics services to the automotive market; Pearl Holding Group, an insurance-services company; Serena Software, an information technology business, which sold to Micro Focus International Plc (LSE: MCRO.L) for $540 million; [20] and Survey Sampling International, which provides data and technology services for consumer and business-to-business research. [7]

Representative Fund I investments include MyWebGrocer; [21] Citadel Plastics Holdings, which sold to A. Schulman (NASDAQ: SHLM) for $800 million; [22] Hollander Sleep Products, which sold to Sentinel Capital Partners; [23] hybris, an e-commerce business that was sold to SAP for over $1 billion; [24] and Sunquest Information Systems, which sold to Roper Industries (NYSE: ROP) for $1.415 billion. [25]

Trademark dispute

H&G Capital Partners logo prior to the 2008 rebranding H&G Capital Partners log.png
H&G Capital Partners logo prior to the 2008 rebranding
Huntsman Gay Global Capital logo after the 2008 rebranding Huntsman Gay Global Capital logo.png
Huntsman Gay Global Capital logo after the 2008 rebranding

After naming the firm H&G Capital Partners, Miami-based private equity firm H.I.G. Capital sent a letter to H&G Capital Partners in March 2008 demanding that the firm change its name. H.I.G., which also makes private equity investments in middle market companies in the United States, claimed that the similarity of the two names would cause confusion in the market. H.I.G. subsequently sued H&G Capital Partners, hoping to prevent H&G Capital Partners from using the name. [9] Previously, H.I.G. had been at the receiving end of similar litigation in Europe. In 2007, HgCapital, a European private equity firm had launched a trademark infringement lawsuit against H.I.G. Capital after it intensified its efforts in Europe. [26]

H&G Capital Partners eventually renamed itself Huntsman Gay Global Capital, which it later changed to HGGC.

Related Research Articles

The Carlyle Group Inc. is a multinational private equity, alternative asset management and financial services corporation based in the United States with $376 billion of assets under management. It specializes in private equity, real assets, and private credit. It is one of the largest mega-funds in the world. In 2015, Carlyle was the world's largest private equity firm by capital raised over the previous five years, according to the PEI 300 index. In the 2023 ranking however, it had slipped to fifth place.

In the field of finance, private equity (PE) is capital stock in a private company that does not offer stock to the general public. Private equity is offered instead to specialized investment funds and limited partnerships that take an active role in the management and structuring of the companies. In casual usage, "private equity" can refer to these investment firms rather than the companies that they invest in.

Bain Capital, LP is an American private investment firm based in Boston, Massachusetts. It specializes in private equity, venture capital, credit, public equity, impact investing, life sciences, crypto, tech opportunities, partnership opportunities, special situations, and real estate. Bain Capital invests across a range of industry sectors and geographic regions. As of 2022, the firm managed approximately $165 billion of investor capital. The firm was founded in 1984 by partners from the consulting firm Bain & Company. The company is headquartered at 200 Clarendon Street in Boston with 22 offices in North America, Europe, Asia, and Australia.

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. Private equity funds are typically limited partnerships with a fixed term of 10 years. At inception, institutional investors make an unfunded commitment to the limited partnership, which is then drawn over the term of the fund. From the investors' point of view, funds can be traditional or asymmetric.

In 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. Given the absence of established trading markets for these interests, the transfer of interests in private-equity funds as well as hedge funds can be more complex and labor-intensive.

Gary Lewis Crittenden is an American financial manager. He is currently an executive director of HGGC, where he also previously served as CEO and chairman. He is also the former chairman of Citi Holdings. He has served as chairman of the boards of Citadel, Power Holdings, and iQor; as lead independent director of Pluralsight; and has served on the boards of Extra Space Storage, Staples Inc., Ryerson, Inc., TJX Companies, and Utah Capital Investment Corp. From 2000 to 2007, Crittenden was executive vice president and chief financial officer (CFO) of American Express, and from March 2007 to March 2009, he was the chief financial officer of Citigroup.

Thomas H. Lee Partners, L.P. is an American private equity firm headquartered in Boston. The firm focuses on investing in middle market growth companies across various sectors, including financial technology, services, healthcare, technology, and business solutions.

<span class="mw-page-title-main">Apollo Global Management</span> American private equity company

Apollo Global Management, Inc. is an American asset management firm that primarily invests in alternative assets. It provides investment management and invests in credit, private equity, and real assets. As of 2022, the company had $548 billion of assets under management, including $392 billion invested in credit, including mezzanine capital, hedge funds, non-performing loans, and collateralized loan obligations, $99 billion invested in private equity, and $46.2 billion invested in real assets, which includes real estate and infrastructure. The company invests money on behalf of pension funds, financial endowments, and sovereign wealth funds, as well as other institutional and individual investors.

AlpInvest Partners is a global private equity asset manager with over $85 billion of committed capital since inception as of December 31, 2022. The firm invests on behalf of more than 450 institutional investors from North America, Asia, Europe, South America and Africa.

<span class="mw-page-title-main">CCMP Capital</span> American private equity investment firm that focuses on leveraged buyouts

CCMP Capital Advisors, LP is an American 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 in leveraged buyout and growth capital transactions since inception. In 2007, CCMP was ranked #17 among the world's largest private equity funds.

<span class="mw-page-title-main">History of private equity and venture capital</span>

The history of private equity, venture capital, and the development of these asset classes has occurred through a series of boom-and-bust cycles since the middle of the 20th century. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel, although interrelated tracks.

Berkshire Partners is an American private equity firm based in Boston. It has invested in over 100 middle market companies since 1986 through nine investment funds with aggregate capital commitments of more than $16 billion. Berkshire has developed specific industry experience in several areas including consumer products and retail, business services, communications, industrials and healthcare. The firm has invested over $50 million to $500 million of equity capital in each portfolio company.

<span class="mw-page-title-main">Early history of private equity</span>

The early history of private equity relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel although interrelated tracks.

<span class="mw-page-title-main">Private equity in the 1990s</span>

Private equity in the 1990s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital, experienced growth along parallel although interrelated tracks.

<span class="mw-page-title-main">Private equity in the 2000s</span>

Private equity in the 2000s represents one of the major growth periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital expanded along parallel and interrelated tracks.

<span class="mw-page-title-main">Friedman Fleischer & Lowe</span> American private equity firm

FFL Partners, LLC, previously known as Friedman Fleischer & Lowe, is an American private equity firm, founded in 1997 by Tully Friedman, Spencer Fleischer, David Lowe, and Christopher Masto. The firm makes investments primarily through leveraged buyouts and growth capital investments and is focused on investing in the U.S. middle-market.

Blackstone Credit, formerly known as GSO Capital Partners (GSO) is an American hedge fund and the credit investment arm of The Blackstone Group. Blackstone Credit is one of the largest credit-oriented alternative asset managers in the world and a major participant in the leveraged finance marketplace. The firm invests across a variety of credit oriented strategies and products including collateralized loan obligation vehicles investing in secured loans, hedge funds focused on special situations investments, mezzanine debt funds and private equity funds focused on rescue financing.

<span class="mw-page-title-main">Capvis</span> Company

Capvis is a private equity firm focused on leveraged buyout and growth capital investments in middle-market companies across a range of industries in the Industrial Corridor of Europe.

Pamlico Capital, which was formerly called First Union Capital Partners and then Wachovia Capital Partners, is an independent private equity firm focused on growth capital and leveraged buyout investments in middle-market companies in the business services, technology services, telecommunications and healthcare industries.

<span class="mw-page-title-main">Trimaran Capital Partners</span> American middle-market private equity firm

Trimaran Capital Partners is a middle-market private equity firm formerly affiliated with CIBC World Markets. Trimaran is headquartered in New York City and founded by former investment bankers from Drexel Burnham Lambert. Trimaran's predecessors were early investors in telecom and Internet businesses, most notably backing Global Crossing in 1997. Trimaran also led the first leveraged buyout of an integrated electric utility.

References

  1. 1 2 3 Falconer, Kirk (June 16, 2022). "Good guy investor HGGC wraps up fourth flagship vehicle at $2.5bn-plus". Buyouts. Retrieved November 29, 2022.
  2. 1 2 Huntsman Gay Closes 1st Fund at $1.1 billion. New York Times, July 15, 2009
  3. 1 2 Allison Collins. "HGGC's Final Close of Second Fund Illustrates Strength of Succession Plan." Mergers & Acquisitions, March 4, 2015.
  4. 1 2 "PKA AIP – Portfolio". Archived from the original on 2015-04-18. Retrieved 2015-04-17.
  5. 1 2 Limited Partner Magazine. https://lpgp.net/sites/lpgp.net/files/lp-gp-mag.pdf
  6. 1 2 3 Kelly, Jason (July 13, 2022). "Steve Young the Investor Finally Stops Running From NFL Career". Bloomberg. Retrieved December 21, 2022.
  7. 1 2 Mary Kathleen Flynn. "HGGC Thrived in Transition to Reap PRIVATE EQUITY FIRM OF THE YEAR." Mergers & Acquisitions, March 23, 2015.
  8. 1 2 "Stocks". Bloomberg.com. 2023-05-24. Retrieved 2023-05-24.
  9. 1 2 "H.I.G. Battles H&G In Name Dispute." Buyouts, April 28, 2008.
  10. 1 2 "Exclusive: Bob Gay leaving Huntsman Gay". Fortune. Retrieved 2023-05-24.
  11. ↑ The Wall Street Journal https://blogs.wsj.com/privateequity/2013/08/29/hggcs-next-play-a-new-fund/
  12. ↑ Melendez, John (August 12, 2021). "L Catterton Takes Majority Stake in Beauty Industry Group". The Middle Market. Retrieved December 21, 2022.
  13. ↑ Weinman, Aaron (November 18, 2021). "NFL MVP Steve Young's private-equity shop is betting big on Planet Fitness. Here's why he thinks gyms will win out over home workouts in the long run". Business Insider. Retrieved December 21, 2022.
  14. ↑ St. Onge, Avery (November 30, 2021). "Fullscript raises $250 million to expand digital supplement dispensary". Business Insider. Retrieved December 21, 2022.
  15. 1 2 HGGC Fund III hits hard cap in oversubscribed $1.84bn final close. AltAssets, December 16, 2016.
  16. 1 2 3 Mary Kathleen Flynn. "EMBEDDED." Mergers & Acquisitions. February 2017, Volume 52, Number 02.
  17. ↑ Annabelle Ju. "HGGC expands LP base to Asia with Fund III." Private Equity International, December 15, 2016.
  18. ↑ CalPERS Alternative Investment Management Program. http://www.calpers.ca.gov/eip-docs/about/board-cal-agenda/agendas/invest/200805/supplement-may08/part-d.pdf Archived 2011-07-19 at the Wayback Machine (May 2008).
  19. ↑ CalPERS commits nearly $1bn to TPG. Private Equity Online, May 8, 2008.
  20. ↑ Demetri Diakantonis. "Micro Focus Buys Serena Software from HGGC, as IT Demands Grow." Mergers & Acquisitions, March 22, 2016.
  21. ↑ Jerry Soverinsky. "All for One – HGGC applies an old-school PE approach to acquiring MyWebGrocer. Middle Market Growth. May 1, 2014.
  22. ↑ Iris Dorbian. "A. Schulman buys Citadel from HGGC and Charlesbank for $800 mln." PE HUB, June 1, 2015.
  23. ↑ Iris Dorbian. "HGGC exits Hollander Sleep Products." PE HUB, October 22, 2014.
  24. ↑ Mary Kathleen Flynn. "HGGC Closes Third Fund Speedily, as Buyers Seek New Technology for Old Markets." Mergers & Acquisitions, December 16, 2016.
  25. ↑ "Roper Industries Completes Acquisition of Sunquest Information Systems." August 23, 2012. http://www.roperind.com/roper-industries-completes-acquisition-sunquest-information-systems
  26. ↑ James Mawson and Paul Hodkinson. "HIG and HgCapital spat over name reaches court." Dow Jones Financial News, June 16, 2008.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.