April 30 (Bloomberg) -- A group of Weston Presidio partners are leaving to start a new investment business after the 23-year old private-equity firm that was an early backer of JetBlue Airways Corp. and owned AMC Entertainment Holdings Inc. failed to raise a new fund.
Sean Honey and Jeffrey Mills are exiting to start Main Post Growth Capital in San Francisco, and will seek to raise $250 million for its inaugural fund, according to two people with knowledge of the situation. Other Weston Presidio partners joining include Michael Lazarus, Scott Bell and Josh McDowell, said the people, who asked not to be named because it’s private.
Weston Presidio, with offices in Boston and San Francisco, canceled marketing of its latest fund after failing in 2008 to gather capital for a sixth investment pool, said the people. It set out to raise $500 million, half the amount it targeted in 2008, said three prospective investors at the time. In the past year, middle-market firms including Brockway Moran & Partners and Code Hennessy & Simmons LLC have decided against raising new funds, as investors back fewer managers, contributing to a shakeout in the buyout industry.
Michael Cronin, founder of Weston Presidio and based in the Boston office, didn’t respond to a phone call and e-mailed request for comment. Chuck Dohrenwend, a spokesman at Abernathy MacGregor, declined to comment on behalf of Main Post.
David Ferguson and Chip Baird, who were partners in the Boston office through 2011 and portfolio advisers after that, according to Weston Presidio’s website, left last year to start a private-equity investment group at Perella Weinberg Partners.
Weston Presidio focuses on consumer, business services and industrial growth sectors. The firm makes investments of $10 million to $50 million in lower middle-market growth companies. It also participated in larger buyouts alongside bigger private- equity firms, including the $1.1 billion buyout of cinema operator AMC Entertainment in 2004.
The San Francisco and remaining Boston teams will continue to manage Weston Presidio’s investments, said one of the people with one knowledge of the matter. The firm raised $1 billion for its last fund in 2005, which had generated a 14.3 percent internal rate of return as of Dec. 31, according to performance data by Massachusetts Pension Reserves Investment Management Board. A 2000 fund is generating a 2.6 percent IRR as of the same date.