Chip Schorr, a senior deal-maker focused on technology, has reportedly left The Blackstone Group to launch his own firm, Augusta Columbia Capital, in the latest in a spate of firm spin-outs.
Augusta Columbia is in the early stages of raising its fund, and will seek $750 million, according to Dow Jones, which first reported the story. The split is amicable, with Blackstone reportedly ready to invest in the fund.
Schorr’s move is the most recent example of firm executives branching out to start their own shop, a risky endeavor given the difficult fundraising market.
“Generally, you see spin-outs in strong times when there is a lot of funding available,” said Colin Blaydon, the director of the Center for Private Equity and Entrepreneurship at the Tuck School of Business at Dartmouth, who has been involved with private equity since the 1980s. “The dilemma they face is it might be a good time to be an investor, but it’s a bad time to be a fundraiser. So someone is going to have to tell a very persuasive story to loosen the purse strings of potential investors, even someone who has an experienced track record to point to.”
Other recent spin-outs include Siris Capital Group, a buyout firm started by executives from hedge fund SAC Capital that is seeking $400 million for its debut fund; and Sycamore Partners, a firm started earlier this year by former Golden Gate Capital executive Stefan Kaluzny that is seeking as much as $1.5 billion for its debut fund. Several spin-outs launched in 2010 as well, including Altamont Capital Partners, led by Jesse Rogers, who co-founded Golden Gate, and Centre Lane Partners, led in part by three former professionals at Monomoy Capital Partners.
New firms can have an advantage with investors, however, if their founders haven’t led many bad deals and if they have novel investment strategies. And though fundraising remains very challenging, it appears to have improved somewhat of late. As of Aug. 1, emerging managers—loosely defined as buyout, growth equity and turnaround firms raising their first or second fund—raised $9.27 billion, a slight increase over the $7 billion the same sample raised in a comparable period in 2010, according to a recent Buyouts feature on emerging managers.
Augusta Capital’s modus operandi appears to be finding small- to mid-market tech deals. The firm will invest $30 million to $150 million, typically in health care information technology and other IT services, Internet infrastructure, Web hosting, software and semiconductors, according to Dow Jones.
Other executives at the firm include Jamie Urry, formerly of Court Square Capital Partners; Clay Albertson, formerly of Blackstone and Court Square; and Ron Collins, formerly of Citigroup Venture Capital, predecessor of Court Square, according to Dow Jones.
Schorr could not be reached for comment. An official at Blackstone did not return a request for comment.