GRAND RAPIDS — Auxo Investment Partners closed fundraising for its first fund after netting $50 million from family offices and institutional investors.
The close last week enables Auxo’s partners to focus solely on seeking and vetting investment prospects.
The Grand Rapids-based private equity firm expects to invest in 10 to 15 companies over the next three years through Auxo Growth Holdings I LLC, deploying an estimated $150 million in capital through co-investments with family offices.
Managing Partner Jeff Helminski called the successful capital raise a “validation of our approach and the values that underlie our unique perspective and our approach to private equity investing, which is flattering and, frankly, it’s humbling when people entrust us as the stewards of their hard-earned capital.
“So now the focus shifts toward looking for our next investment opportunities and operating the companies that we’ve already acquired.”
Auxo Growth Holdings I was oversubscribed, and the investment firm closed the fundraising after hitting $50 million.
While raising capital is “always difficult,” Auxo Investment Partners found success as investors looked for alternative investments, Helminski said.
“There’s a lot of capital looking for homes outside of the public markets right now,” he said. “Times are good, the economy’s strong, and the public markets have had a run up in the last number of years and so people only want a certain allocation in the public markets.
“When they get more value there, they’re looking for other places, so there’s a lot of capital looking for good opportunities.”
Formed in 2016 by Helminski, Jack Kolodny and Fred Tedori, Auxo Investment Partners has already invested $30 million to acquire three die manufacturers, plus M/G Transport Services, a barge company based in New Orleans.
The fund has two more deals in progress that should close within a couple months, plus “some interesting opportunities in the pipeline,” Helminski said.
Auxo Investment Partners invests in companies based in North America that are involved in manufacturing, industrial, value-added distribution and business service sectors and have annual EBITDA of $1.5 million to $15 million. The firm seeks to acquire companies with owners who want to retire, are family-owned and lack a succession plan because they do not have the next generation to take over the business, or are seeking capital to grow.
The fund will hold the companies for the longer term — for five to seven years or more. Investors who put money into the fund also invest separately in acquisition targets alongside Auxo Investment.
The family offices that invested in the Auxo Growth Holdings I are involved in the sectors and industries in which the fund invests, or have backgrounds in building private equity funds, Helminski said. That gives the fund added expertise and insights internally that it can apply to grow the companies it acquires.
“We’ve been able to build strong relationships with substantial and active family offices who created their wealth in the industries we’re looking to invest in, which offers immense benefits both to Auxo and our portfolio companies,” Helminski said.
Investors in the private equity fund came from “all over the country,” including the Midwest and as far away as Texas and the east and west coasts, he said.