Brentwood Associates

Brentwood Associates is one of the oldest private equity firms in the US with groups focusing on both leveraged buyout and venture capital investments.

Brentwood Associates
TypePrivate
IndustryPrivate equity
Founded1972 (1972)
FounderFrederick Warren, Timothy M. Pennington III, B. Kipling Hagopian
HeadquartersLos Angeles, United States
ProductsLeveraged buyout, Venture capital
Websitebrentwood.com

The firm, which is based in Los Angeles, was founded in 1972. The firm has raised approximately $2.3 billion since inception across 13 funds. The firm's leveraged buyout business raised approximately $1.4 billion across four funds, the earliest of which was raised with $140 million of commitments in 1990.[1] The venture capital group raised over $900 million across nine funds, the earliest of which was formed in 1980 and the last of which was raised in 1998, prior to the spinout of the firm's venture business.

History
History of private equity
and venture capital
Early history
(origins of modern private equity)
The 1980s
(leveraged buyout boom)
The 1990s
(leveraged buyout and the venture capital bubble)
The 2000s
(dot-com bubble to the credit crunch)

Brentwood was founded by Frederick Warren,[2] Timothy M. Pennington III[3] and B. Kipling Hagopian[4]

Leading investor in start up companies in the late 1990s. Raised a $300 million venture fund in 1998. Brentwood Venture Capital was founded in 1972 as Brentwood Associates. Over the last 26 years, Brentwood has grown to be one of the oldest and largest firms in the venture capital industry, having raised over $1 billion in capital and investing in over 300 entrepreneurial companies[5]

In 1999, the partners from Brentwood joined with partners from Institutional Venture Partners (IVP) and Crosspoint Ventures and created two separate industry-focused firms with the relevant firm making new investments in each of the respective industries:

  • Redpoint Ventures, focusing on early stage information technology investments[6]
  • Versant Ventures, focused on health care venture investments

In 1999, Redpoint raised a $600 million venture fund Ventures I, at the time the largest first-time fund for a new firm.[7]

Investments

Since inception in 1972, Brentwood has invested in more than 40 companies across a wide array of industries.[8] It has over $650 million of assets under management and usually invests between $20 million and $200 million in each portfolio company.[9][10] The firm's leveraged buyout practice has focused on acquiring more mature businesses, while its venture capital group has invested in earlier stage, startup companies.

Buyout investments

The firm's leveraged buyout practice has completed more than 30 acquisitions. Among the most notable companies in which Brentwood has invested include: Ariat, Oriental Trading Company,[11] Bell Sports,[12] Bell Automotive, Prince Sports,[13] C.C. Filson,[14] Graphic Controls Corporation,[15] The Teaching Company,[16] Stanley Works, and Zumiez.[17]

In 2007, Brentwood Associates bought a controlling stake in Zoës Kitchen.[18] In April 2014, Zoës Kitchen's IPO offering raised $87.5 millon.[19]

In July 2013, Brentwood Associates acquired Lazy Dog Restaurant & Bar.[20] In 2014, Brentwood acquired Marshall Retail Group in August and Z Gallerie in October.[21][22]

Venture capital investments

Brentwood's venture group, prior to its spinout separation in 1999, was among the most prominent investment firms in the 1990s Internet boom. Among the firm's most notable investments in software and internet businesses during this period included: Wellfleet Communications, Xylan, Documentum, ISOCOR, WebTV Networks and Freegate. After 1999, investments in the internet and information technology sectors were made by Redpoint Ventures.

Brentwood also had a long history of investing in health care companies with strategically important products or services. Today, the vast majority of Brentwood's successful healthcare investments have been acquired by and integrated into larger healthcare companies including Baxter Healthcare and Medtronic. Among Brentwood's most notable investments included Keravision, Aradigm, Webster Laboratories and Interflo Medical.

References
  1. New Buyout Fund Set by Brentwood. New York Times, May 5, 1989
  2. http://www.cambriagroup.com/team/board-of-advisers
  3. Sky diving into venture capital risks. Los Angeles Business Journal, Feb 19, 1990
  4. B. Kipling Hagopian Archived 2012-05-11 at the Wayback Machine. Forbes Profile
  5. Brentwood Venture Capital Closes $300 Million Fund. November 9, 1998
  6. The gods of capitalism: Redpoint Ventures explains why making five times your money isn't enough. CNN Money, August 29, 2000
  7. REDPOINT VENTURES CLOSES $600 MILLION FUND, New Firm Raises Largest First Fund Ever. November 8, 1999
  8. Max, Sarah (29 July 2013). "If Its Customers Love a Business, This Equity Firm Does, Too". The New York Times. The New York Times Company. Retrieved 4 December 2014.
  9. "Brentwood Associates". CrunchBase. AOL Inc. Retrieved 5 December 2014.
  10. "Company Overview of Brentwood Associates, Inc". Bloomberg Businessweek. Bloomberg L.P. 16 December 2014. Retrieved 16 December 2014.
  11. Brentwood Associates to sell Oriental Trading Company to Carlyle Archived March 7, 2008, at the Wayback Machine. June 14, 2006
  12. BELL SPORTS AGREES TO BE BOUGHT BY HB ACQUISITION. New York Times, February 18, 1998
  13. A 2d Pond's Unit Is Sold in a Month (Prince). New York Times, June 16, 1987
  14. Brentwood Associates partners to buy Seattle garment maker. Los Angeles Business, January 24, 2005
  15. BRENTWOOD ASSOCIATES REPORTEDLY TO SELL COMPANY. New York Times, July 27, 1995
  16. "Berkery, Noyes & Co. represents The Teaching Company in its sale to Brentwood Associates" Archived August 12, 2007, at the Wayback Machine, October 3, 2006.
  17. Zumiez Gets Investor To Help Growth. Transworld Snowboarding, November 5, 2002
  18. Goodman, Sherri C. (November 2, 2007). "Zoe's Kitchen selling big stake Cassimus sees deal as spice for expansion". The Birmingham News.
  19. Das, Avik (10 April 2014). "Restaurant chain Zoe's Kitchen valued at $276 million in IPO". Reuters. Thomson Reuters. Retrieved 19 December 2014.
  20. Dunford, Thomas (29 July 2013). "The Morning Leverage: Brentwood Throws a Bone to Lazy Dog". The Wall Street Journal. Dow Jones & Company, Inc. Retrieved 15 December 2014.
  21. Miet, Hannah (26 August 2014). "Brentwood Associates Acquires Marshall Retail Group". Los Angeles Business Journal. Los Angeles Business Journal. Retrieved 11 December 2014.
  22. Dunford, Thomas (14 October 2014). "The Morning Leverage: GTCR in Talks for Gorkana Group". The Wall Street Journal. Dow Jones & Company, Inc. Retrieved 10 December 2014.
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