It was recently announced that Palo Alto based private equity firm HGGC was selling a minority interest in one of their holdings in Davies Group Ltd. to Canadian institutional investment fund manager Alberta Investment Management Corporation (AIMCo). Davies Group is a consulting and technology solutions provider for UK insurance groups, high regulation financial services, and other entities such as utility companies and telecom. The selling of this minority stake in Davies will add to large capital access for them as well as offer a larger shareholder base. HGGC Principal John Block stated that this decision was made to allow Davies Group to keep growing rapidly as it had added over 100 new clients in just the last year, and the technology the company has invested in and implemented was tremendously impacting their clients. Block and his fellow executives look forward to this new funding partnership with AIMCo.
HGGC has several different funds that they run that have yielded great returns to their investor assets. The firm was started in 2007 when Chairman and CEO Rich Lawson teamed up with John Huntsman and Robert Gay to start Huntsman Gay Capital Partners in 2007, and the first fund from that began their investments was the $1.1 billion Fund I. Six years later, Fund II would be launched and raise $1.3 billion in shareholder commitments, and some of the institutional investors who came on board in this round were Denmark-based PKA-AIP and British pension provider West Yorkshire Pension Fund. Fund III, the latest round of capital influx totaled $1.84 billion, which has brought the firm’s total capital commitments today to $4.3 billion.
HGGC believes in investing through building key partnerships and taking on the middle markets through recapitalization of companies that plan on using updated technology to change smaller markets in retail and sales outlet stores. The spectrum of these companies ranges from industrial to healthcare, though software companies have represented a major part of their strategy and they’ve been a majority holder in Serena Software for about five years. A little known fact about HGGC is that another cofounder and managing partner in the firm is former NFL Hall of Fame quarterback and current ESPN network analyst Steve Young.