The company’s ultimate target for the Mauloa Fund I is $100 million, according to a recent Securities and Exchange Commission filing. Mauloa is a minority, non-control equity investor, meaning it takes a minority stake that allows the recipient to maintain control.
The first and second funds were $26 million and $65 million, respectively. Founder and Managing Partner Andrew Sachs said the firm ultimately invested much more than that for each fund — around $80 million and $120 million — through sidecar vehicles where investors put up more capital for individual investments.
The raise comes during a slow period for fundraising for investment firms in general. Total capital raised by private equity firms globally in the past year was down 16.6% from the prior year, according to PitchBook data as of June 30. Uncertainty about the economy plus fewer exits — companies being acquired or going public, giving investors an opportunity to profit and gain capital to make new investments — have both contributed.
“People are very cautious,” Sachs said about raising funds today. “We’re very lucky in that this is the third fund I’ve raised in 17 years and so we take our time,” Sachs said. The last fund his firm raised was in 2015. Still, he noted, “I’d be lying to you to say that it’s easy out there.”
Mauloa makes investments of between $15 million and $25 million in companies that have between $20 million and $100 million in annual revenue and are cash flow positive, according to its website. Its investors are family offices and high-net-worth individuals, and it invests without an exit timeline. It’s industry agnostic although it avoids early-stage companies and real estate. To date, it’s deployed more than $200 million and invested in more than 20 companies, it said.
And it’s already made the first investment out of its new fund to O’Connor Plumbing, a Chevy Chase, Maryland, company. It’s unclear exactly how much the firm invested in the 74-year-old local company, run by the founder's sons, but it disclosed that it had raised $7.5 million as a separate, sidecar fund in an SEC filing this week. Sachs confirmed that the sidecar was for the O’Connor Plumbing investment.
Todd Mohr, former president and CEO of multibillion-dollar staffing firm Aerotek, joined Mauloa as a general partner this fall. Mohr’s focus will be on helping portfolio companies with their growth strategies and identifying potential deals for Mauloa. Mohr’s hiring brings the number of people on the firm’s operating team to nine.
Sachs had previously presided over investment firms KMS Investments Inc., Capital Investors II LLC and Bethany Partners LLC before he founded Sachs Capital in 2007. Locally, its investments have included Congressional Bank, retail brand Bluemercury, which was sold to Macy's (NYSE: M) for $210 million, and events software company Cvent Inc.
Source: Washington Business Journal