A team of ex-Houlihan Lokey bankers have started their own firm to advise growth companies in the Washington D.C. area.
The executives, all from Houlihan’s business services group, formed Clearsight Advisors in July, says Joel Kallett, who is the firm’s co-founder and MD. Kallett is joined at Clearsight by Greg Treger, also a co-founder and MD; Bhavin Patel, a vice president; and, Bethany Seidler, director of administration.
Clearsight, based in McLean, Va., will target growth companies in technology and services with $25 million to $200 million in enterprise value, says Kallett.
There are no local boutique banks in the D.C. area that focus on business and technology services, says Kallett. Investment banks in the vicinity –which include BB&T Capital Markets, Houlihan Lokey and Bluestone Capital Partners–target companies that service the government. “There are a whole wealth of companies that are exciting and dynamic and there’s not really a local investment bank with experience and the relationships to focus on [them],” says Kallett, who headed up the business services team at Houlihan.
Clearsight has raised funding from former clients to aid in its launch and help hire more staff. Kallett declined to reveal how much the firm has collected or the investors. However, Clearsight will add a banker in two weeks and another is expected to join at the end of the year. The merchant bank expects to have roughly eight staffers by the end of 2011, Kallett says. “We know we have enough funding to aggressively pursue our business plan to grow this firm,” he says.
As a merchant bank, Clearsight will also invest in deals. Any stakes will be small, Kallett says. “We won’t lead a deal but will participate in the financing,” he says.
While market volatility and the European debt crisis have seemingly put many deals on hold, Kallett says that’s not true. “Deals are getting done,” he says. “At least in the areas where we are focused, they’re getting done.”
Due diligence is just taking longer, Kallett says. He also see opportunity. All the turmoil, plus challenges created by Dodd-Frank Act, will likely cause some IB talent to look for new platforms and new homes, he says.
“We’re not trying to time the market,” adds Treger. “We think it’s a good time to be in the market. There’s a lot of capital in the PE community, a lot of cash in corporates, and all the uncertainty will elongate some deal processes. We don’t see [volatility] stopping the markets in any way, shape or form.”