Roark Capital Cools to Financial Services, Cuts DeAngelo

Buyout firm Roark Capital will no longer make financial services investments, a decision which leaves Partner Larry DeAngelo out of a job, according to a source familiar with the situation. DeAngelo joined the Atlanta-based firm in 2005 to lead its financial services investments.

His tenure at Roark officially ended on December 31.

The firm’s decision to move away from financial services happened gradually. When its most recent fund closed in 2008, the firm intended to invest much of the $1 billion in capital into its two core areas of focus: franchising and environmental services. The firm also planned investments in financial services, direct marketing and business services companies, three areas led by DeAngelo. However, the firm hasn’t found adequate opportunities in financial services, the source said, so Roark Capital has officially dropped its focus on that area. The firm will continue to look at direct marketing and business services deals. In recent years, Roark Capital brought in Ezra Field to lead the firm’s efforts in direct marketing and promoted Anthony Scotto to Managing Director to oversee the firm’s efforts in business services.

Roark Capital declined to comment and DeAngelo did not respond to inquiries.

The firm hasn’t done a financial services deal with its current fund; its last five deals have been in the franchising industry. In the fourth quarter of 2009, Roark Capital invested $100 million in equity into non-hazardous solid waste management company Waste Pro USA. The company also acquired Pet Valu, a Canadian pet food and supply retailer and distributor. Roark’s $1 billion fund is 30% deployed, the source said.

Roark Capital added 6 buyout professionals to its team in the past year, bringing its total to 36.