Firm Profile: Brockway Moran –

Brockway Moran & Partners has seen its share of sunny weather-in more ways than one. The weather benefits of Florida aside, the firm has not seen many rainy days on the LBO front during the past year either. Completing nine deals since August 2002, Peter Brockway, a managing partner since he co-founded the firm in 1998, insists there is a simple formula for the firm’s success.

“Our nucleus has been completing leveraged buyouts since the 1980s,” Brockway said. “Most of the people starting back then have morphed over time; one thing that’s different with us is that we began doing $100 million deals in the 1980s and stuck with them.”

While Brockway said the firm looks to complete platform deals with a transaction range between $50 million and $200 million, “our center of gravity is $75 million and $125 million.”

Founded in January 1998, Brockway and Michael Moran, the firm’s other managing partner, set out to raise their first fund. The two met in 1993, on opposite sides of a deal that saw Moran’s intermediary firm introduce Brockway’s Trivest team to plastics manufacturer Penda Corp. Within a year, Moran jumped to the Trivest team, and four years later, the two co-founded the firm that bears their names along with 30-year operations veteran H. Randall Litten.

The firm immediately set out to raise its first fund, and in a sign of the deep-pocketed times, did not see a need to hire an investment bank to lead its fundraising. In lieu of a placement agent, “we contacted approximately 25 people, most of whom we’d known for years.” With a target of $125 million and a hard cap of $200 million, the firm had no trouble capping out by June 1998. Flagship investors included Goldman Sachs, Brinson Partners (now Adams Street Partners) and PPM America.

“We have been supporters and backers of Brockway Moran since the beginning, and have invested all our clients in funds I and II,” said Marc Sacks, a partner with fund-of-funds shop Adams Street Partners. “We’ve been impressed with the thoughtful way in which the firm has gone about building brand awareness…and we’ve been pleased, as investors, in the quality of investments, and the progress of various portfolios. They stay true to their plan.”

Three years after closing its first fund, Brockway Moran held a final close on Fund II, a $410 million investment vehicle. However, instead of increasing the average size of their deals, they walked the line. “Not only did we decide to stick with doing $100 million deals, but we also stayed true to our sector focus, and never got swept up in the telecom and Internet craze.” For this fund, the firm hired Credit Suisse First Boston as its placement agent, and held a first close inside of three months. “We could have taken in more money, but decided not to go bigger-we think we found our sweet spot,”said Brockway, referring to the $410 million Fund II.

Limited partners for Fund II include Pathway Capital, Massachusetts Institute of Technology, University of Chicago and Wilshire Associates. If the name rings a bell, Wilshire is headed up by Dennis Tito, a man who may stick to conservative, steady-growth investments, but isn’t afraid to risk his life. In April, 2001, Tito became the first paid passenger into space, paying the near-broke Russian space program $20 million for a ticket to ride into space in a Russian SOYEZ rocket. If only Aeroflot, the Russian recognized those frequent flier miles.

“We wanted smart investors, that would be around for a while,” said Brockway. “Correspondingly, we decided to raise money from people and groups that were focused on the investment itself, and not on deal flow. We’re never in a rush to spend money.”