DJ Aldrich Capital Hits $450 Million Hard Cap for Second Fund
2021 Dow Jones & Company, Inc.
By Chris Cumming
Lower midmarket growth firm Aldrich Capital Partners has secured $450 million for its second investment vehicle, hitting its hard cap amid strong demand from institutional investors.
The vehicle, Aldrich Capital Partners Fund II, exceeded both the firm's $350 million target and the $256 million that Aldrich raised for its first fund, which closed in June 2018. Monument Group Inc. served as placement agent for the new fund, Aldrich said Wednesday.
Based in Vienna, Va., Aldrich focuses on healthcare information technology, financial technology and application software companies, typically backing those with revenue of $10 million to $30 million, said Mirza Baig, an Aldrich managing partner. The firm typically invests in founder-led companies outside the main U.S. tech and venture hubs of California's Silicon Valley, New York City and Boston, he said.
Investments from the firm's debut fund include ProcessMaker Inc., which makes business process-management software, and Rhythm Management Group Corp., which provides remote-monitoring services for cardiac care.
Mr. Baig said one quality that differentiates Aldrich from other growth-equity investors is the firm's emphasis on operational details and improving the companies it backs, a focus that comes from his and co-founder Raheel "Raz" Zia's entrepreneurial backgrounds.
"We're willing to take on operationally intensive work," he said.
Before founding Aldrich in 2014, Mr. Baig worked at AOL Time Warner, and Mr. Zia, also a managing partner, helped start Goldman Sachs Group Inc.'s growth-equity investment practice. Earlier, Mr. Zia co-founded and led mobile app software company Knumi Inc., which he sold to Houghton Mifflin Harcourt Co.
Both men also worked together on healthcare IT startup Imaging Advantage, which Mr. Baig co-founded and which Mr. Zia's Goldman Sachs unit backed. The two initially met at Harvard Business School, Mr. Baig said.
Public pensions that have invested in the new vehicle include the Connecticut Retirement Plans and Trust Funds and the Public School Teachers' Pension and Retirement Fund of Chicago, according to publicly available documents.
Mr. Baig said the new fund will follow the same strategy as the previous vehicle, and he expects to begin investing from it this year. Among the investment themes that he said he expects to take advantage of in the coming years are the automation of white-collar work and, in healthcare, the increasing need for treatment of chronic diseases and the growth of at-home care.
Write to Chris Cumming at [email protected]
(END) Dow Jones Newswires
September 15, 2021 07:30 ET (11:30 GMT)