Graycliff Partners

Year Founded: 2011

Former Firm: Graycliff comprises HSBC’s former U.S. private equity arm, HSBC Capital. It was the fourth private equity group to spin out of the bank, as it and other Europe- and U.S.-based banks re-evaluated their private equity operations in light of new regulations such as the Volcker Rule provision of the Dodd-Frank financial reform law in the United States, which limits banks’ private equity activities.

Key Executives: James Marley was the former managing director and head of private equity investment program at HSBC Capital, the U.S. private equity arm of HSBC; Dave Mullen was the former managing director and head of private equity North America at HSBC Capital. Other managing directors include Stephen Hindmarch, who held the same title at HSBC Capital and had been with HSBC for 23 years; and Andrew Trigg, who had joined HSBC Capital in 2005 and before that was a vice president at DeltaPoint Capital, a private equity firm focused on small to mid-market buyouts.

Key Backers: Unclear

Fundraising Status: Marley told Buyouts for a December 2011 story that the firm expected to start raising its first independent funds, focused on the United States and Latin America, within the next year. The targets for the fund would resemble amounts the firm had raised under HSBC—$300 million for its most recent U.S. buyout fund, closed in 2007, and $200 million for its most recent Latin American fund, raised in 2009, Marley said. Marley declined to comment for this article.

Secret Sauce: Graycliff enters the market with an investment versatility and global presence most new firms don’t have. It makes equity, mezzanine and real estate investments, typically investing $5 million to $25 million in companies generating revenues of at least $10 million. It takes minority and control-stake interests, with a specialty in the manufacturing, service or distribution sectors.

It also has experience investing in both North America and Latin American, which is home to some of the most attractive emerging markets for private equity firms. Its North American portfolio includes Aptalis Pharma Inc., a Canadian pharmaceutical company focused on gastrointestinal disorders; Boom LLC, a New York-based developer of cosmetic brands; and Globe Food Equipment Co, a Dayton, Ohio-based outfit that provides slicers, warming equipment and other food preparation equipment for restaurants. Its Latin American portfolio includes Arabela S.A. de C.V., a Toluca, Mexico-based distributor of cosmetics, deodorants and other home products; Credivalores-Crediservicios SA, a provider of consumer loans in Columbia; and Medquimica, a Juiz de Fora, Brazil-based pharmaceutical company.

Early Track Record: Executives declined to comment.

Fund Terms: Unclear.