Blackford Capital?
Saw these guys pop up recently. They seem like a hard working group but a real grind based on their LP base (HNW). Any insight?
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I know they are a pretty aggressive/ predatory Midwest private equity firm. A handful of their transactions are distressed businesses. They run a buy and build model on a lot of their deals and are relatively successful with sourcing small tuck in transactions. Their LP base is a little different and pulls a lot from Midwest family offices.
Don't have a great reputation IMO. Do hairy deals as the poster above mentioned and have a fair amount of employee turnover. My sense is that you get maxed out at the associate level because they don't want to pay VPs.
I also know their junior guys do a fair bit of sourcing.
That being said, there aren't many opportunities in GR, so its worth considering depending on circumstances.
They had some co-invest available for a deal at the beginning of covid and were reaching out to every fund known to man to participate. It was a U.S. MM business that creates the metal slabs that bodies lay on in a morgue. Because of covid their sales went up significantly and they were buying it for a really low multiple. I dunno, I just got the vibe that the head guy was a bit slimy. Their LPs are all retail - they get in like $50k cheques per investor.
Yea I heard the same about the LP base. A relationship with local PWM professionals that funnel dollars from HNW individuals
That's a good LP base from the perspective that they will usually pay very full fees but it's bad in that they're often a huge pain in the ass to deal with. Imagine having like 1800 LPs who contribute on average like 50-100k per fund. That's a nightmare.
Did some research on this firm previously through a college classmate that worked there for a while. From what I could gather, not a great firm overall. Founder had a bad reputation and pulled some shady moves when he restarted the firm in Michigan. Had a partner in California and they split up as they couldn't get aligned. Turned over almost their entire team when he was there. Not just investment team, included their controller and other operations jobs too. Hire interns who do most of the deal sourcing by calling IBs and asking for opportunities. LP base is a huge number as mentioned previously, but most all of their LPs are cutting very small checks. Also had two other MDs leave because of the Owner's behavior who started their own firm in Grand Rapids. They raised a full fund in no time and are eating Blackford's lunch. Hours were IB hours and pay was poor. Do a capital raise for each individual deal as they don't have a fund raised. Because of this, it seems they only participate in hairy deals where they can get a low multiple.
That makes perfect sense. Right I remember - they're an independent sponsor that uses a wealth manager to pool in HNW cheques for individual deals right? Nightmare scenario.
Corroborating all of this. They've turned over most if not all their staff in the last ~12 months. Many went to Gun Lake Casino's tribal investment group and others to various LMM funds in Chicago/Detroit. A couple of ex-Blackford guys also launched their own fund out of Detroit since Covid started. There's another fund in GR (Auxo Investment Partners) that I think eachisown is referencing here that has an actual fund (~$50mm) too that you should look into if GR is your sticking point. No clue how much Auxo pays:works but I would be surprised if it's somehow a worse experience vs. Blackford.
Bingo, agreed with all above comments re: Blackford's rep and Auxo's success. Pretty familiar with both and the individuals associated, Blackford guys are just slimy.
What would prompt someone to work there?
Enjoy:
https://casetext.com/case/kiehn-v-stein
Bump ? Seems like a tough place for anyone and have heard similar stories about lack of ethics from the founder. Also heard rumors about retrading deals and lying about investment returns.
At the beginning of COVID they bought a business that crates the the metal slabs that you put dead bodies on in a morgue. Cost something like 3-4x EBITDA and they sold it for like a 12x MOIC
Not possible, they still own that company - at least according to their own website.
Heard that the other PE firm in the area, Auxo, has really overtaken them in recent years.
Auxo is on a different level than Blackford, which has a long history of legal issues and isn't a serious shop:
https://casetext.com/case/mcclarin-plastics-inc-v-blackford-capital-inc…
This firm is a clown show led by a megalomaniac. The entire team has turned over a few times over the years.
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