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Exclusive: King Bolts Irving Place to Start Culpeper Capital

David King, a longtime senior managing director with Irving Place Capital, has left to start his own private equity firm, he told peHUB.

King has launched New York-based Culpeper Capital Partners, which will focus on investments in financial services and business services companies with a financial services focus or customers. Culpeper also has a joint venture with Fortress Investment Group’s credit fund business that will allow the PE firm to invest $20 million to $200 million per deal.

“After nearly 10 years at Irving Place Capital and its predecessor Bear Stearns Merchant Banking, I believe now is a great time to pursue dedicated investing in these areas,” King said in an email obtained by peHUB.

Culpeper officially launched on March 28, King said in an interview with peHUB. “I think it’s a very interesting time in the cycle,” he said. “There is lots of opportunity.”

King was one of eight senior managing directors at Irving Place, where he focused on financial services.  At Culpeper, he is also senior managing director. King will remain on the board of Irving Place’s financial services portfolio companies, he said.

Scott Lustig, an associate at Irving Place, has joined Culpeper as a vice president, while Vince Caruso, the ex-CFO of CardWorks, is a senior advisor. William Quirk, a former Endurance Capital analyst, is an associate. “Everyone has deep experience in financial services, and operating and investing,” King said.

Instead of picking a Greek or Roman god, King opted to name his new firm after Culpeper, Va., the town where he bought his Jack Russell terrier (“Pepper”). “It’s a name that was readily available on the Internet and it was not taken by anyone,” he said. “I didn’t want to wait for a more intellectual name.”

Culpeper will not be fundraising anytime soon, King says. Instead, the joint venture with Fortress allows the PE firm to immediately start making deals. Culpepper will have the flexibility to buy majority or minority stakes and can invest debt or equity. The firm can also buy assets or going concerns, King said. “One of the nice things about the relationship with Fortress is to be able to enter the market instantly and have the capital to do the deals,” he said.

Fortress will have a stake in any companies Culpeper backs, but King declined to give specifics.

New York-based Irving Place Capital was previously known as Bear Stearns Merchant Banking. BSMB split off from Bear Stearns after the investment bank collapsed and was acquired by JP Morgan Chase in 2008. BSMB then renamed itself Irving Place. The New York buyout shop is investing from its third fund, which raised $2.7 billion in 2007.