Union Square Partners Reverts to Capital Z

Capital Z Partners is back, after a litigious sojourn as Union Square Partners.

The New York-based firm has been around for more than a decade, making private equity investments in the financial services sector. Then early last year it changed its name to Union Square Partners, in order to better distinguish itself from an affiliated hedge fund sponsor named Capital Z Asset Management. At around the same time, it began raising a $500 million-targeted fund.

When I first heard about the name change, my first thought was: “Why pick that name? Isn’t the firm physically closer to Gramercy Park than Union Square?” Then I thought: “Wow, I wonder how Union Square Ventures is going to react?”

The answer was with a lawsuit. USV is a New York-based early-stage venture firm whose partners include the blog-quacious Fred Wilson. It argued trademark infringement, as evidenced by alleged confusion among LPs and other business contacts.

Both sides reached an out-of-court settlement earlier this year, which included the provision that Union Square Partners give up its new moniker (money did change hands, but I’ve never been able to confirm the specifics). So it returned to Capital Z Partners, rather than coming up with something new.

In a related note, Capital Z Partners hasn’t been making much noise lately on the fund-raising front. It officially held a $250 million first close on the fund in the spring of 2007, but nothing has been announced since. Chances are it’s sticking at its first close mark, but I’ll let you know if I hear differently or definitively.