RW Capital Partners LLC, a newly established private equity firm in Beverly Hills, has launched a fund that will invest in small businesses across the country.
The firm, founded in September by a pair of private equity veterans, hopes to raise $50 million in capital primarily from institutional investors.
The firm is seeking approval from the Small Business Administration to be licensed as a Small Business Investment Company, which is a privately managed firm providing equity investments in small companies. If RW Capital receives approval, the SBA could contribute as much as $100 million to the new fund.
Though the economy is far from booming, the firm believes now is the right time to invest in companies. Ellery Roberts, managing partner of RW Capital, said the economic downturn has led to a “natural selection” in the market, showing which companies have the wherewithal to survive.
“It should be easier to pick which companies are deserving of support,” said Roberts, who co-founded the firm with Michael Wingard. “We feel that the dislocation in the marketplace … is going to lead to an opportunity for us to provide capital at fairly attractive rates.”
Roberts, a one-time captain of the Stanford University football team, previously co-founded Parallel Investment Partners in Dallas, and spent time at Lazard Freres & Co. and Colony Capital Inc.
Wingard spent nearly two decades handling commercial lending for CIT Group Inc. and GE Capital.
Despite the economy, the pair said they thought it would be a good idea to strike out on their own because they have an appreciation for cyclicality in the markets.
“There’s always a reason to be concerned when you’re in an environment like this,” said Wingard. “But we think we have a particularly good niche.”
Capital Raise
California Oaks State Bank, a community bank in Thousand Oaks, announced last week that it has commenced a stock offering expected to generate up to $100 million.
The bank said it may use proceeds for a variety of purposes, including repurchasing outstanding shares, increasing its assets or acquiring a failed institution from the Federal Deposit Insurance Corp.
Additionally, the bank hopes to repay the funds received through the U.S. Treasury Dept.’s Troubled Asset Relief Program. In January 2009, California Oaks received $3.3 million in TARP money.
News of the offering sent the bank’s thinly traded shares up sharply, hitting a high of $9.80, a 63 percent increase, the day it was announced.
Growing Delinquencies
Homeowners in Los Angeles are falling behind on their mortgage loan payments at rates far above the national average, according to a study released last week.
More than 12 percent of all homeowners in Los Angeles were at least 60 days behind on their payments in the fourth quarter of 2009 – nearly twice the rate nationwide – according to data from TransUnion, a Chicago-based credit information company. It is the 12th consecutive quarter that the delinquency rate has risen.
What’s more, the average mortgage debt locally was $352,996 per borrower, compared with $193,690 for borrowers across the United States.
TransUnion warned that the situation could get even worse as large numbers of adjustable-rate mortgages, including so-called option ARM and Alt-A loans, reset. The notorious loans were popular in Southern California, which was home to many adjustable-rate mortgage lenders, including IndyMac and Countrywide.
“When the interest rates on these loans reset, many consumers potentially will not be able to meet their debt obligations,” said F.J. Guarrera, vice president of TransUnion’s financial services division, in a statement.
C-Suite News
Manhattan Bancorp, the El Segundo parent of Bank of Manhattan, announced
the departure of Chief Executive Jeffrey Watson. Executives declined to provide a reason for Watson’s departure. Harry Chenoweth was named interim chief executive while a permanent replacement is sought. … Diamond Capital Partners, a middle-market investment bank in Century City, announced that Lawrence Johnson has been hired as a managing director. … BNY Wealth Management, the money management subsidiary of Bank of New York Mellon Corp., announced that David Emmes was named head of West Coast markets. Emmes will be based in Los Angeles.
Staff reporter Richard Clough can be reached at [email protected] or at (323) 549-5225, ext. 251.
