Fund Exec to Put Focus on Women’s Businesses

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After more than 20 years of winding through the worlds of high-yield bonds, publishing and entertainment consulting, Lorraine Spurge is trying out private equity. But she will draw from a limited pool.

The Michael Milken confidante and alumna of his Drexel Burnham Lambert bond shop is leading APCO Capital Strategic Growth Alliance, or SGA, an L.A. firm that will invest in companies owned or led by women.

The fund is backed by Salt Lake City private equity group APCO Capital.

“A lot of women don’t have the same network and infrastructure and training that men might have,” said Spurge, who wrote an advice for entrepreneurs column for the Business Journal from 1998 to 2000. “And often, women don’t promote themselves as much.”

But SGA isn’t all about leveling the playing field. It’s about making money by investing in what Spurge believes are companies that have been overlooked by the capital markets or that are led by executives who haven’t tried to get noticed.

“We’re not a charity,” she said. “My investors want to make the same kind of returns they’d get in any other private equity fund, 20 percent-plus. It’s not just that people aren’t looking for these companies, it’s also that women aren’t asking for money. Women need to be raising their hands.”

Already, though, Spurge said others in the investment world have raised eyebrows at her plans.

“People say, ‘Really, that’s what you’re doing?’” she said. “I’m looking for five companies a year. You’re telling me I can’t find five companies led by women that are creditworthy?”

SGA will look for companies with revenue between $25 million and $50 million that are free-cash-flow positive and have growth potential. The firm will make investments of about $30 million, some of it in the form of debt.

Spurge said SGA might seek a large minority or controlling stake, though it will typically want current management to stay on.

“You want to do this in a way where management or equity owners feel they can be an equal partner with you and not get kicked out,” she said.

Though decidedly focused on women, Spurge said she wouldn’t turn down a deal with a company owned or led by men. But even then, she might want to help put women in key roles.

“I want to do the best deals I can find,” she said. “And if there’s an ability to put a woman in as CEO or CFO of a company we invest in, we’ll do that. It’s a little extra push.”

Arranged Marriage

West L.A. private equity firm Marlin Equity Partners said last week that it is combining two of its recent acquisitions: the optical networking businesses of Sycamore Networks Inc. and Nokia Siemens Networks.

Marlin bought the Sycamore business unit in Chelmsford, Mass., in January for $19 million. Shareholders of the struggling parent company have since voted to shut down the rest of the company. Marlin bought the networking business of Finland’s Nokia-Siemens joint venture last month, renaming the business Coriant GMBH. The value of that deal was not disclosed.

Last week, Marlin executives said Sycamore will now be folded into Coriant and called Coriant America Inc. It’s not clear if Marlin executives had such a combination in mind when the Sycamore acquisition was made.

Marlin officials did not return calls for comment.

Viva Cathay

Pasadena’s Cathay Bank is doing business in Sin City after opening its first Las Vegas branch last week.

Cathay General Bancorp last month acquired a branch and $40 million in deposits from Houston’s SWNB Bancorp, which had operated in Las Vegas as the now-defunct Nevada National Bank.

Cathay did not acquire any of Nevada National’s loans.

Executives said Las Vegas was not of particular interest to the bank, but that they jumped at the opportunity when SWNB put Nevada National up for sale.

The former Nevada National branch reopened as a Cathay Bank branch June 18. It is located about three miles due west of the Treasure Island casino on the Strip.

C-Suite News

Joseph Carieri will join downtown L.A. investment firm TCW Group Inc. next month as head of institutional distribution and marketing. He was formerly an executive at Pasadena’s Western Asset Management Co.

Staff reporter James Rufus Koren can be reached at [email protected] or (323) 549-5225, ext. 225.

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