Emerging firm Delos, minus executive, hits market with Fund II

Delos Capital, launched in 2013 by a former Vision Capital and Apollo Global Management executive, is in market with its second fund after an acrimonious split with one of its top deal executives, sources told Buyouts.

Delos is targeting $300 million with a $400 million cap for Delos Investment Fund II, sources said. The firm has recently started fundraising, one source said.

The split will make assessing deal track record on the first fund tougher, said one limited partner with knowledge of the firm. The LP said Delos Founder Matt Constantino was sole key man on Fund I, so the split didn’t trigger an LP vote on ending the investment period. Constantino declined to talk about the split.

The New York firm makes control and distressed buyouts in companies with $10 million to $30 million of EBITDA, Delos’s Form ADV says. It focuses on sectors including chemicals, packaging, industrials and consumer.

Delos closed its first fund on $250 million in 2015, according to a media report. The gross asset value of the fund was $296.4 million as of March 27, 2017, the Form ADV shows. Performance information on the fund was unavailable.

Delos was formed by Constantino, who came out of Vision Capital, where he led the Americas business. He was joined by Andrew Schweibold, who worked with Constantino on the Americas business at Vision, an archived version of Delos’s website says.

Constantino and Schweibold also worked together at Apollo prior to Vision.

Last year, Delos settled for an undisclosed amount with Schweibold after the firm asked the Delaware Chancery Court to declare Schweibold did not have a 25 percent equity stake in the firm, Law360 reported. Schweibold’s attorney, Patrick Smith of law firm Smith Villazor, did not return a request for comment.

Other Delos executives include Chief Financial Officer and Chief Operating Officer Sanjay Sanghoee; Partner Robert Scaramella, and Principals Michael Rakiter and Will DeBruyn. Scaramella joined the firm in January; he previously was founding general partner of family office Hudson + East Partnership, his LinkedIn profile said. He worked at Yucaipa Cos from 2007 to 2012.

Recent investment activity included Delos-backed Interstate Restoration, which provides disaster recovery, acquiring FirstOnSite Restoration. That deal was announced in June 2016.

Action Item: Delos’s Form ADV: http://bit.ly/2o6JiyS

A competitor holds a baton at the start line of the men’s 4 x 400m Relay Round 1 at the 2016 Olympics at Olympic Stadium in Rio de Janeiro on Aug. 19, 2016. Photo coutesy Reuters/Lucy Nicholson