Mistral Spins Out of Trimaran

Last month, I reported that middle-market buyout firm Trimaran Capital Partners had canceled fundraising and suffered the departures of four professionals to Columbus Nova. Two days later, this ran in a Friday Feedback column:

Justin on Trimaran: “One of your competitors reported that Trimaran will be back in the fundraising market later this year. Who’s right? Them or you?” Great question Justin. I know exactly why that was written – because I know exactly who said it (I got the same call). Let me just say this for now: If there does happen to be a third Trimaran-branded fund, it will not feature the same partnership as the prior funds… And I’m not just referring to the folks who left last week.

Ok, time to spill the proverbial beans. Trimaran managing partner Andrew Heyer has launched a new firm called Mistral Equity Partners, which also will include folks like Trimaran managing director Bill Phoenix. It will focus on consumer/retail plays, with an inaugural fund target of between $400 million and $500 million. Yes, there are a number of funds out there like this, but Mistral will have some competitive advantage because it’s formed a partnership with the Schottenstein family – serial acquirers of such consumer companies as American Eagle, Filene’s Basement and DSW Show Warehouse. Jay Schottenstein will be a part-timer with Mistral, while the family and Heyer will combine to commit around $50 million to the initial fund. Mistral also includes an operating board of current CEOs like Donnie Deutsche and Steven Heyer (Andrew’s brother, and current head of Starwood Hotels).

Just for context, Trimaran currently has eight significant portfolio companies, by which I mean there are eight companies in which it has a controlling interest or otherwise significant investment. It also has a few other small stakes via various co-investments. Half of these were deals led by either Heyer or Phoenix (plus another that Phoenix and a remaining Trimaran partner did together), and the pair will continue to represent Trimaran on those boards. Heyer’s current board seats include Hain Celestial Group, Brite Media Group, Charlie Brown’s, Village Voice Media and El Pollo Loco. Phoneix’s include Urban Brands, Eureka Broadband Corporation, Charlie Brown’s, Brite Media Group and Reddy Ice Holdings.