Fidelity Ventures has a new running mate: Fidelity Equity Partners, which will focus on growth equity and leveraged buyout opportunities in the financial services and business services sectors. The group has $500 million in debut fund capital from the parent corporation, and offices in both Boston and London. It also has a pedigreed partnership, including London-based Nick Martin (co-founder of Hg Capital) and Boston-based Brooke Ablon (previously with Riverside Company).
If you vaguely member Fidelity already having a small buyout group, you’re probably thinking of Fidelity Capital Investors – which was dismantled after working through just under half of its $200 million fund. FEP will continue to manage the two remaining FCI portfolio companies (Avtek and Precision Control Services), but expects to have more of a growth focus than FCI’s value-focus. Target investments will have enterprise values of between $50 million and $150 million, with organic growth of at least 10 percent. Most of its deals will be of the control variety, but it will consider select minority positions.
Martin says that he left HgCapital last May, after the firm began shifting its focus away from small high-growth deals toward larger, value-based opportunities. He began shopping a new firm around London, before Fidelity heard about it and came calling. “It was really a no-brainer, since what they wanted to do and what I wanted to do were essentially the same thing.” Ablon says that he spent nine “great” years at Riverside, but that he was drawn by the ability to help manage a new firm and the ability to leverage the Fidelity family of businesses.
Do not expect the creation of FEP to prevent in Fidelity Ventures from doing the occasional growth equity deal, but rather that the two will likely work together. For example, FEP participated alongside Fidelity Ventures in last month’s acquisition of a majority interest in Asset Control, a provider of centralized data management solutions to the financial services industry. Rob Ketterson, managing partner of Fidelity Ventures, is also a partner of FEP.