(Bloomberg) -- Private equity firm Valeas Capital Partners, founded in 2021 by former Hellman & Friedman executives, has closed its first institutional fund at more than $600 million.
The San Francisco-based firm, which invests in lower-middle-market companies, said in a statement that it now has total assets of about $1.2 billion.
The fundraising comes after a few years of a challenging funding environment. Higher interest rates and a lack of asset sales have put pressure on private equity firms. Money raised by US firms fell in 2023 to the lowest level since 2020, Bloomberg News previously reported, making it a tough time to start a new firm.
Valeas founders Rob Little and Ed Woiteshek met while working at Hellman & Friedman. Little moved on to Golden Gate Capital, where he was chief operating officer for a decade.
Woiteshek worked on the investing side at Hellman & Friedman for 10 years and took on operating roles at portfolio companies, including as chief executive officer of vehicle data firm CarProof Corp. starting in 2014.
The pair’s background helps Valeas differentiate, they said in an interview.
“As we were formulating the strategy for Valeas, we believed that a key differentiator was our experience on both the investing side and the operating side,” Little said in an email. “Our nontraditional careers enable us to see and do things a little differently from most conventional PE firms.”
Valeas, which has about 15 people on staff, invests in professional and financial services companies, health care and technology and information services.
Almost two-thirds of the fund has already been invested, Little and Woiteshek said. Valeas is flexible and open to doing both minority and majority deals. Check sizes can range from $50 million to $140 million and higher, depending on co-investors.
One of the firm’s first transactions was investing in Cinqcare, a home health-care company, in a 2021 deal where founder and chief executive officer Tony Welters remained the majority shareholder.
“They had spent time understanding what I was attempting to accomplish in the business,” Welters said in an interview. “The economics followed, which is different from a lot of VC/PE people that I’ve run into.”
Welters added that Valeas helped his company attract state pension funds to invest as well.
The Texas Teachers Retirement System is a backer of Valeas, according to the firm’s website. Asset manager Pantheon also invests in the fund.
“For us, it was a known team and we were excited about their commitment to the lower middle market and people intensive businesses like wealth management,” Pantheon Ventures partner Susan Long McAndrews said in an interview. “We like the combo of Rob, who has investment and firm-building experience, along with Ed, who has investment and operating experience.”
Valeas has completed five platform investments, including acquiring the majority stake in accounting and consulting firm Baker Tilly this year, alongside Hellman & Friedman.
In 2022, it bought a minority stake in wealth manager Sequoia Financial Group for $200 million.
(Updates with additional details, comments starting in 11th paragraph)
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