Less than five months after the U.S. team of Standard Life Investments quit en masse, it has reemerged as a new private equity shop called Constitution Capital Partners. The firm will make both fund commitments and co-investments in the small-cap to large-cap buyouts space, with a particular focus on the middle-markets.
“This is the same strategy we followed at Standard Life and, before that, at State Street,” says Dan Cahill, a managing partner with Constitution. “It’s a lot of heavy lifting because there are over a thousand or so firms in the middle-markets, but you can generate very strong returns if you do your homework.”
Constitution’s team has previously made fund commitments with such firms as Sun Capital Partners, New Mountain Capital, Avista Capital Partners, Eos Partners, The Sterling Group, Sterling Investments Partners, Sterling Partners and Towerbrook Capital Partners.
Cahill would not disclose the target capitalization of Constitution’s debut fund, although he did say to expect a first close in early summer. The firm does not plan to use partner capital to make interim investments.
Constitution’s six partners were the former U.S. team of Standard Life Investments, but left last October after being shut out of the firm’s partnership economics. Specifically, parent company Standard Life agreed to partially spin SLI out into an independent firm called SL Capital, by selling a 40% ownership stake to nine managers. None of those managers, however, were part of SLI’s Boston-based team – which was managing a $300 million North American fund-of-funds. Instead, they were all based in Edinburgh, where they oversaw a €900 million European fund-of-funds. Cahill and company complained to no avail – eventually opting to leave.
In the aftermath of their departures, SLI initially denied that the team was gone – taking voice mails and keeping the partners up on the firm’s website. An SLI spokesman would later claim that the team’s loss was not terribly significant, as it had not assumed deal-sourcing, marketing or fundraising functions. Those allegations were false, and the spokesman later walked them back.
The former SLI team includes includes Cahill, John Guinee (managing partner), Robert Hatch (partner), Vincente Miguel Ramos (partner), William Richardson (partner) and Alexander Tatum (principal). Constitution also plans to add a pair of senior professionals, and some junior staff.