Peterson Partners Announces Closing of $120 Million Fund
May 15, 2008 - Peterson Partners, a private equity company in Salt Lake City, has raised $120 million for an investment fund from backers that include JetBlue Airways founder David Neeleman and Dave Checketts, owner of Real Salt Lake.
The money was raised quickly over two weeks in April, proving there is still a strong appetite for investing in fast-growing, small and midsize businesses in spite of the weak economy.
"It suggests there is still quite a bit of capital out there that wants to invest in this sector," Jordan Clements, Peterson's managing partner, said Tuesday.
Cash for the investment fund came from 20 investors who also include members of former presidential candidate Mitt Romney's family and Steven Wheelwright, the new president of Brigham Young University-Hawaii.
Peterson speculates in companies with revenues of at least $10 million, usually in the business services, consumer products and light manufacturing industries. The average investment is about $10 million, and the fund aims for a return of at least 30 percent a year, although over Peterson's 13-year life, returns have averaged twice as much.
"Most of the companies we invest in are ultimately sold to a strategic buyer, a larger company in a related industry. Those exits typically occur in five to eight years," Clements said.
The fund is Peterson's fifth investment pool since the equity company was established in 1995.
"I've been in three of the four [earlier] funds since inception, and have found based on the track record of Peterson Partners and the high integrity of the principals and the fact that they really have a unique niche within this area, [it] has given me a lot of confidence to invest again," said Robert Nakasone, former CEO of Toys "R" Us.
In the past, Peterson has bought into companies such as budget air carrier JetBlue, nuclear waste management provider EnergySolutions Inc. and 3form, a Salt Lake City maker of architectural design panels.
About 40 percent of Peterson's portfolio is with Utah-based companies, although it recently helped bankroll Azul, Neeleman's new Brazilian airline, which is set to begin flying in January. Last year, Peterson put $3 million into K.P.R. Mill Ltd., an Indian textile manufacturer