Apax Partners co-founder Alan Patricof is leaving the firm he helped launch 35 years ago to start a new digital-media focused venture fund, Greycroft Partners. The new fund is being launched with an initial $50 million (€42 million) of capital.
Patricof cut his teeth in the venture space and participated in some wildly successful investments, such as early-stage bets in Apple Computer, America Online, New York Magazine and others.
He first launched Apax predecessor Alan Patricof Associates in 1969, following a stint at Central National Corp., where he headed up the company’s private investment arm. After a number of mergers overseas, most notably in Europe, his firm took on the Apax Partners handle in 1991.
Since that time, the group has grown considerably, and has slowly moved away from its venture roots into growth financing investments and buyouts. The firm’s European arm raised a €4.3 billion fund last year, while Apax’s US arm is currently seeking $1.5 billion for its latest vehicle, according to placement agent sources.
Apax augmented its later-stage focus when it absorbed buyout firm Saunders Karp & Megrue early last year, a deal that vaulted Allan Karp and John Megrue into co-chief executive roles of the US group.
Patricof, in contrast, is going back to the venture space, and in doing so has also turned back the clock as it relates to the size of his new fund. “I very deliberately kept this fund, which was oversubscribed, small, and sought out sophisticated, high net worth investors who understood the vast potential in this space,” he said in a statement. “The fund’s controlled size will allow us to be disciplined about who we ultimately invest with, ensuring we partner with the very best young companies in this emerging industry.”
The comments regarding fund size go against the industry trend to raise as much as the market will bear, as evidenced by the recent $10 billion-plus targets of the industry’s new mega funds. It was Apax’s own Martin Halusa, the CEO of the firm’s European arm, who told The Times in January he could foresee a $100 billion private equity fund being raised in the next ten years.