Friedman to stick with FFL 5-6 more years

“We have a formal succession that is supported by the partners and LPs,” Friedman told sister website peHUB on the sidelines of the PartnerConnect LP GP Summit, sponsored by Thomson Reuters in New York.

Friedman helped launch the firm originally known as Friedman Fleischer & Lowe in 1997 and is the firm’s chairman and CEO. The San Francisco buyout shop is run by three senior partners: Spencer Fleischer, who is president; Chris Masto, a senior MD; and Friedman.

“I don’t plan to leave for the next five to six years, God willing,” said Friedman, who would not disclose which individual would take his place. “I would like to continue on in an advisory role.”

FFL invests in mid-market companies and focuses on sectors including financial services, consumer and healthcare services. The firm is out fundraising for its fourth fund, which has a $1.5 billion target and a $2 billion hard cap. Fund IV is expected to close above its $1.5 billion target, Buyouts reported in August.

FFL’s last fund collected $1.5 billion in 2008. Friedman Fleischer & Lowe Capital Partners II LP is producing a 13.8 percent net IRR and 2x multiple as of March 31, performance data from the California Public Employees’ Retirement System showed. Executives at FFL declined comment.

Friedman, one of the early pioneers of private equity, also launched Hellman & Friedman in 1984 with Warren Hellman. Hellman & Friedman is also out marketing for its eighth buyout fund, which is expected to hit its $10.25 billion hard cap.

Now 72, Friedman doesn’t plan on starting another private equity firm when he leaves FFL. He said he would like to combine his interest in art and collecting. “I’m a design guy,” he said. “I’d like to take an interest in a really good gallery with a really smart owner. Most likely in San Francisco.”

Luisa Beltran is a senior writer for peHUB. Additional reporting by Steve Gelsi.