United Investment Managers, the Chicago-based firm recently acquired by former Aldus Equity executive Marcellus Taylor, is looking to launch a mezzanine-focused fund of funds in the latter part of the first quarter of 2010, Taylor told Buyouts.
Potential supporters will have to get past Taylor’s association with the disgraced and defunct private equity advisory firm Aldus Equity, whose founder, Saul Meyer, pleaded guilty to illegal pay-to-play charges in October. Taylor worked as a partner Aldus Equity until August 2007, although he told Buyouts he never had any contact or communication with Hank Morris, Barrett Wissman or Jack Hardy, the placement agents that pleaded guilty to improper activity at the New York State Common Retirement Fund.
The new fund, which is slated tol be the firm’s flagship private equity vehicle, will have a target of $300 million. Taylor is finalizing the fund’s marketing materials and strategy, but has not yet spoken to potential limited partners.
The firm intends to commit to eight to 12 mezzanine funds, making pledges ranging from $10 million to $35 million. In the past, Taylor has directed investments into mezzanine funds run by The Carlyle Group, Levine Leichtman Capital Partners and Smith Whiley & Co.
United Investment Managers seeks backers from public pensions, high-net-worth families, Taft-Hartley labor funds and Fortune 500 company pensions. “We will have a very broad marketing effort for the fund,” said Taylor.
Taylor acquired United Investment Managers a few months ago. The firm has about $260 million under management, all of it from public pension clients including Public School Teachers’ Pension & Retirement Fund of Chicago, Municipal Employees Annuity & Benefit Fund of Chicago and Fulton-DeKalb Hospital Authority.
This spring, New York State Comptroller Thomas DiNapoli, sole trustee of the New York State Common Retirement Fund, filed a civil suit against Aldus Equity, as well as principals Taylor, Meyer, Matthew O’Reilly and others, for wrongful conduct, including fraud, bribery, breach of contract and conspiracy. Taylor said he was named as a defendant in that suit because he was an executive at an emerging manager fund that Aldus Equity ran for the pension. DiNapoli is seeking to recover $5 million in management fees from Aldus. Taylor has been indemnified by Aldus and Deutsche Bank, which formerly owned a stake in the advisory firm, for these charges.
Pay-to-play activity involving Aldus Equity also took place in New Mexico, but an assistant United States attorney for the district of New Mexico has said that Taylor is not a subject or target of any investigation there, according to Taylor’s attorney Richard Roper.