Circle Peak Partner Launches New Firm

John Poerink has left Circle Peak Capital to launch a private equity effort alongside James Hedges of hedge fund LJH Global Investments. LJH has dabbled in buyouts but the new effort, called Linley Capital, formalizes its activity, the firm announced today.

Poerink was one of two partners at Circle Peak, where he led the firm through more than $400 million worth of investments, mostly in the consumer products industry. He left to work under a more flexible investment mandate than typical middle market LBO strategies require, he told me. In a time of increasing specialization, Poerink and Hedges are doing the exact opposite of the crowd.

“We’re saying that (private equity) is a business that requires a broad approach and a broad understanding of the economic swings that take place in the US, Europe and Latin America,” Poerink said. “To myopically focus on one sector or geography would disadvantage ourselves.”

Like Circle Peak, Linley Capital will be fundless, securing investments from high net worth individuals and families. Unlike Circle Peak, Linley will have the flexibility to invest across sectors and continents, and the backing of LJH, allowing it to move more quickly with deal opportunities.

The three most important pieces to this story are as follows:

Q: What will happen to Circle Peak’s current investments?
A: Poerink will continue with his obligation to the portfolio companies he is associated with. He still sits on the board of companies like Rocket Dog Holdings, a shoe company, and Luxury Optical Holdings, a retail eyewear chain, which Circle Peak own. Poerink continues to be a large investor in those and other Circle Peak deals.

Q: Will Linley Capital raise a standard buyout fund?
A: No. “For the time being we really like this setup, and that is not the intent,” he said. With LJH Global Investments’s backing, the firm is capable of spending up to $800 million on a deal, Poerink said. This is an upgrade from Circle Peak’s $500 million cap. Furthermore, the point of the current structure is to avoid the trap of getting locked into an inflexible strategy, which a traditional fund would require.

Q: What kinds of deals will Linley Capital do/how will it differ than Circle Peak?
A: The main difference will be foreign investments. Poerink expressed an interest in Latin American and European targets, as well as a variety of sectors. His expertise in consumer products will influence some investment decisions, but not limit the firm. Poerink said he plans to tap a growing pool of operational advisors for opportunities in sectors that include anything from steel manufacturing to beverages.