Windward Capital Loses Three to Spin-Out Group –

After four and a half years together at Windward Capital Partners, L.P., former partners Noel Urben, James Ahstrom and Adrienne Halper are leaving the firm. Although their future plans have yet to be solidified, both Urben and Ahstrom said they are interested in starting a new effort together along with Halper and one or two others from different firms. Urben declined to discuss who the others will be or the focus of the new group. Halper could not be reached for comment.

According to Ahstrom, he left Windward because of a difference in investment styles and preferences; the remaining partners seemed to favor manufacturing investments while Ahstrom, Urben and Halper leaned toward less capital intensive and higher growth investments. He said Urben, Halper and he ultimately worked better together while the other Windward partners did the same.

“There is no singular formula for success in this business,” he said. “But it is very important in private equity for people to work well together. Noel’s experience is extraordinarily valuable and as long as he is energized about putting together a new effort, I have every confidence we will stay together.”

Investing Disputes Lead to Split

Urben said the partners at Windward had conflicting styles and personalities. At age 61, with 19 years in private equity, he said he is not ready to quit the business. He said, although planning for a new effort is in the early stages, the new group definitely will deal with private equity.

“I set a goal for myself of 100 deals and I’m only at about 60 [deals], so I can’t stop now,” Urben said. Before coming to Windward where he was senior managing director with Gary Swenson, Urben was president of BT Capital Partners. He said he would like to be president again in his next effort.

As far as feedback from investors goes, a source close to the firm said L.P.s officially voted to waive their right to vote on terminating the fund instead of triggering the key-man provision. Neither Ahstrom nor Urben would comment further on the provision or the ensuing vote.

Ahstrom said Urben, Halper and he had not been discouraged to leave by any of the investors. He said he would hope some of the L.P.s would follow them if they raise their own fund.

The three partners who will remain with Windward are Swenson, Peter Macdonald and Thomas Sikorski. Since the departure of Urben, Ahstrom and Halper, Windward has promoted Mark Monaco and James Johnson to managing director. Swenson did not return calls seeking comment by press time.

Windward Capital is in the midst of investing its $325 million second fund, Windward Capital Partners II, L.P. Ahstrom said the fund is about one third invested, and the performance of the fund did not play a part in his decision to leave Windward.

Windward Capital got its start investing in buyouts, along with The Clipper Group, for Credit Suisse First Boston, until two years ago, when the bank decided to make and manage private equity investments under its own banner of Credit Suisse First Boston Private Equity (BUYOUTS June 9, 1997, p. 1). Windward then struck out on its own, closing earlier this year on its second fund, which was less than half the size of its $825 million first fund.