Sterling Group’s small-market team launches auto services platform; Trinity Hunt invests in Centricity Research

Morning!

This is Chris, on for Wire Wednesday.

There was a deal last week that slid under the radar that had more significant implications beyond the fact of the transaction.

Sterling Group, of Houston, announced the launch of Premier Tire & Service, a tire and auto services provider platform run by John Adams, the former CEO of Full Speed Automotive.

The deal was struck by Sterling Group’s newish smaller market team that it is calling

Sterling Foundation. Sterling’s Foundation fund closed earlier this month on about $636.6 million, according to a Form D fundraising document. The pool, which launched fundraising last year, had an initial target of $500 million, according to SEC documents and a source with knowledge of the process.

Sterling managed to form the new strategy as the fundraising and deal environment slowed, and as other firms are pausing or pulling capital raising efforts for ancillary products. It’s led by Lucas Cutler, who joined Sterling Group in 2021 from CenterOak Partners, a spinout from Brazos Private Equity that he helped form.

“We believe that it is a particularly interesting time to be building businesses in the industrial and services sectors given a number of macro tailwinds that we expect in the industry over the next few years,” Cutler said in a statement to Buyouts.

Examples include “an increased emphasis on nearshoring supply chain capabilities post COVID resulting in continued investment in the US manufacturing and distribution sectors and a massive need for investment and development in aging US infrastructure.” Read more here in Buyouts. 

Research
Trinity Hunt Partners made a majority investment in Centricity Research, which provides research services for Phase I-IV clinical trials across more than 40 therapeutic areas.
Trinity Hunt plans to work with Centricity Research’s management to expand the company’s capabilities and therapeutic coverage organically and through add-ons. “The clinical research industry is highly fragmented, and clinical trials are becoming increasingly complex for sponsors and CROs to execute,” said John Oakes, principal at Trinity Hunt in a statement.

Trinity Hunt closed its sixth fund on $460 million in 2021. Last year, the firm raised $618 million for a two-asset continuation fund led by StepStone Group and Schroders Capital. The two assets were Argano, which provides tech services to businesses, and tech-services company Improving.

Valuations
Tiger Global’s efforts to sell stakes in investments across its portfolio has some limited partners watching closely for how the deal prices. If bids come in at a steep discount, some LPs are ready to use that data point to question other VCs invested in the same assets about their valuations and why they are not writing them down. Each asset in the sale will likely have several other VC investors alongside Tiger, some up into the double digits, according to an LP with a corporate pension.

The situation could get especially tricky for VCs raising new funds who could be forced to spend time and money justifying their valuations to potential new investors questioning their marks, sources said.

The issue goes to the heart of a point of contention in the industry today – that GPs (both VC and private equity) are holding values at what some limited partners consider artificially high levels. Read more here on Buyouts.

That’s it for me! Have a great rest of your day. Reach me at cwitkowsky@buyoutsinsider.com or find me on LinkedIn with tips n’ gossip, feedback or book recommendations.