Executives of NewWorld Capital Group LLC, a New York-based firm making growth equity investments in energy efficiency and related markets, are out having second and third meetings with potential backers for a fund targeting $300 million, according to sister magazine Buyouts. One of those executives joined in January without, surprisingly, making much of a media splash: former First Lady of New York State Silda Wall Spitzer.
About $40 million to $50 million in commitments to NewWorld Environmental Opportunities LP is spoken for, said Bales. Ideally, he added, the firm would like to reach a $100 million first closing this November and to hold rolling closings building to a final closing by the middle of next year. While not employing a placement agent to approach North American investors, the firm may hire one to help raise money from European investors later this year. Earlier in his career, as a managing partner of The Wicks Group of Companies, a New York private equity firm that specializes in education and media, Bales worked with Merrill Lynch to raise a $383 million fund in the late 1990s, and with Credit Suisse to raise a successor of $535 million fund a few years later.
NewWorld Capital makes growth equity investments in mid-sized and small companies operating in five main markets: energy efficiency, clean energy, water resources and reclamation, waste-to-value and environmental services. Together companies in these markets are generating some $350 billion in annual revenue in the United States and growing two to four times as fast as GDP, Bales said. They’re taking advantage of long-term trends such as the planet’s move away from its dependence on oil and gas as energy sources; growing scarcity of water and other resources; the need to reduce pollution and head off global warming; and the desire by companies to reduce costs.
Within these markets NewWorld Capital prefers investing in complex situations involving U.S. and Canadian companies that have commercially viable products generating positive EBITDA and that need $15 million to $40 million to scale up production and distribution. The firm avoids technology risk, regulatory risk, hydrocarbon-pricing risk and capital-intensive business models.
Through the first quarter of this year the firm had sourced and screened some 586 deals and closed two. The firm and a group of co-investors invested about $30 million in equity last August to acquire Cleaire Advanced Emission Controls LLC of San Diego for an estimated $55 million. The company manufactures filters that help reduce emissions from diesel engines used in trucks and other vehicles.
Earlier the firm committed $15 million in equity (to be invested in installments as the company hits milestones) to Denver-based Coolerado Corp., a maker of energy-efficient commercial air conditioning units, Bales said. At the end of this month the firm expects to have invested $12.5 million in equity in the company. NewWorld Capital intends to close two more transaction in the next quarter, including a third transaction next month using money from a $50 million separate account it manages for funds-of-funds manager North Sky Capital (known as Piper Jaffray Private Capital prior to its recent spin-out).
Bales emphasized that NewWorld Capital is not about double bottom-line investing. The firm is about generating a high return for investors; any good the companies end up doing for people or the planet is simply a side benefit.
Still, the potential for doing good was an attraction for Spitzer. She joined NewWorld Capital in January as a principal after a stint as managing director at investment firm Metropolitan Capital Advisors. “For me it’s all about impact,” said Spitzer, 54, whose responsibilities include business development. Spitzer, who early in her career was an M&A and corporate finance attorney at Skadden, Arps, Slate, Meagher & Flom LLP, has been working to reduce air pollution through a number of recent activities. As First Lady of New York state from 2007 to 2008, Spitzer worked on programs to promote the administration’s goal of a 15 percent reduction in fossil energy consumption by 2015; she is co-vice chair of the Urban Green Council, the New York chapter of the U.S. Green Building Council, which works to reduce energy consumption in cities…
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Image Credit: NewWorld Capital Group