KCPS & Co. is planning a new private equity fund according to Globes. The firm is planning to launch the fund, its second, in 2012 after raising $120-150 million. KCPS’s first fund, KCPS Private Equity, launched in 2006 after the group had raised $80 million.
David Steinhardt Founded KCPS
KCPS was founded by David Steinhardt, son of Michael Steinhardt who had achieved success in the hedge fund arena. Steinhardt has several partners, including Gilead Halevy, Gilead Shavit and Uri Einan. According to Globes, the three men’s involvement in KCPS is limited to the fact that they each sit on both funds’ investment committee. Globes reports “KCPS Private Equity” has made five investments and one exit since its inception, “the sale of a 53.35% stake in Danel (Adir Yeoshua) Ltd (TASE:DANE) to DBSI Investments Ltd. in June for NIS 115 million, reflecting a company value of NIS 200 million, for a three-fold return on investment.” The Globes writes of KCPS’s success, “Halevy is proud that this yield is considered unusual, given the times.” He said, “We met the asset managers of American universities’ funds who said that the cash flows of the best funds in our harvest were 1.7 times the money. It should be remembered that funds raised in 2007 stopped investing in companies before the crisis.”
David Steinhardt Discusses KCPS’s Investment Strategy
The Globes interviewed Steinhardt about his investment strategy. He explained that “Private equity is a long-term investment field. Two weeks of uncertainty doesn’t change the picture. Complicated times requires in-depth review. Hard times usually create good opportunities.” Steinhardt also explained that his firm does not invest in distressed companies and looks to acquire majority interest in the companies it invests in. KCPS also keeps around 25% of its fund free for investment opportunities. Right now, it maintains a portfolio of five companies, each from diverse industries: Steel production and assembly company Brand Industries Ltd (TASE:BRND), mushroom and spice company Marina Galil, Ltd., quality testing company Qualitest, Ltd. and FIS Solutions, which is now merged with IDIT Technologies and Sapiens International NV (SPNS). According to Globes, “KCPS manages a private equity fund, hedge funds, and the Manof Fund, each with its own investment mandate and no overlap.”