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Cornell Capital to add two from Avenue Capital amid $2 bln fundraise

  • Stephen Trevor to join Cornell as partner from Avenue Capital
  • Henry Cornell targeting $2 billion for firm’s latest fund
  • Vehicle to invest in mid-market businesses

Avenue Capital Group Portfolio Manager Stephen Trevor will join his former Goldman Sachs Merchant Banking colleague Henry Cornell at Cornell Capital, according to limited partner presentations and memos obtained by Buyouts via public-records request.

Jesse Lucco, also of Avenue Capital, will join Cornell Capital as a managing director. Both Avenue Capital executives will transition to their new firm in the spring, according to the presentation.

In addition to Trevor and Lucco, Cornell Capital was in advanced discussions to fill slots for three principals and a second managing director as of mid-December, the Hamilton Lane report shows. The new members will work beneath Cornell Capital’s partnership group, which includes Cornell, Trevor, Joanna Reiss, Joyce Hsu, Justine Cheng and Richard Drucker.

A December due-diligence memo prepared by Hamilton Lane indicated that Cornell Capital was in “advanced discussions” to bring on a new partner in late 2016. A March 3 investor presentation for Cornell Capital Partners III, targeting $2 billion, noted Trevor would join the firm as a partner.

Trevor previously co-led Morgan Stanley’s merchant-banking division and private equity group. Like Cornell, he is also a former partner in Goldman’s merchant-banking division, which was responsible for investing the firm’s series of GS Capital Partners funds.

GS Capital Partners VI, a $20.3 billion 2007 vintage fund, is one of the largest traditional buyout vehicles ever raised, according to Preqin.

Cornell Capital plans to assemble its team by April, the Hamilton Lane report says. The firm held a first close for Fund III in September on $850 million.

Both Trevor and Lucco were still at Avenue Capital as of March 21.

Cornell Capital will invest $100 million to $1 billion per deal, typically in North American and Asian companies operating in dislocated or non-cyclical industries. One existing investment, for $363 million of preferred securities in pipe-and-valve distributor MRC Global, was being held at a 17.5 percent net internal rate of return and 1.28x multiple, according to the investment presentation.

In its presentation, the firm also noted that deals attributed to its professionals had totaled more than $19.5 billion of invested capital and grossed 2.1x since inception.

Henry Cornell founded Cornell Capital in 2013 after 30 years at Goldman Sachs. The firm is based in New York, with a Hong Kong office led by Hsu.

Action Item: Reach Cornell Capital: +1 212-450-4745

Photo courtesy shironosov/iStock/Getty Images

Correction: The story was corrected to remove references in the standfirst and second paragraph that indicated Trevor and Locco had already joined Cornell. As noted in the eighth paragraph, both are still at Avenue Capital.