Michael Devlin: Countdown to 2008

Michael Devlin of Pharos Capital Group predicts the rise of business services as more Hispanic entrepreneurs turn to private equity for capital.

Michael Devlin

“In 2008, we expect to continue to see the growth of momentum in private equity interest in companies that cater to a Hispanic demographic or are led by Hispanic management teams.

While 2007 was characterized by Hispanic private equity deals in healthcare, restaurants/foods, and media, we believe that 2008 will see an increased interest in companies that focus on business services.

We also believe that Hispanic entrepreneurs that traditionally may not have sought out private equity dollars will consider private equity partners going forward, as a result of the recent demystifying of the private equity industry.” Michael Devlin, managing partner, Pharos Capital Group

Pharos had an eventful 2007, executing deals in each of the industry sectors it targets: healthcare, business services and technology.

In March, the private equity firm, which has offices in Dallas, Texas and Nashville, Tennessee, participated in a $16 million follow-on financing round in semiconductor company Alereon. Three months later, Pharos took part in a consortium that paid $40 million for Back Yard Burgers, a fastfood chain in the Southeast US.

In August, Pharos teamed with Goldman Sachs' Urban Investment Group and Haas Wheat to buy healthcare staffing company Nursefinders from Gryphon Investors for an undisclosed amount. The following month, the firm led a $25 million financing round in Time Domain, an ultra wideband products company.

And in October, Pharos was one of the fund mangers chosen to be a recipient of roughly $1 billion in new capital that the New York State Common Retirement Fund is committing to emerging managers, including women- and minority-owned firms. The firm manages $500 million in capital.