Fundraising

Rustic Canyon debut fund holds interim close

The Santa Monica-based venture group has partnered with three principals to launch its debut fund, focused on the US emerging domestic market.

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Rustic Canyon / Fontis Partners LP, a later-stage private equity fund focused on businesses targeting emerging domestic markets has closed on $71 million (€60 million), according to a filing with the SEC.

The Santa Monica-based venture group Rustic Canyon Partners helped launch the new fund with the father and son team of Daniel Villanueva Sr. and Daniel Villanueva Jr., and Gabrielle Greene.

The elder Villanueva has played a role in founding Univision, a Spanish language broadcaster, and later was a co-founder of Bastion Capital, which has been credited with being the first US private equity group to specifically target the Hispanic market.

The younger Villanueva also has an entrepreneurial background, having helped found the Los Angeles Galaxy, a professional US soccer team, as well as a marketing agency.

Greene, meanwhile, comes from software company Gluecode, where she had served as CFO prior to its sale to IBM.

Renee LaBran, a partner at Rustic, will sit on the investment committee of the fund, joined by Rustic Canyon head Tom Unterman.

According to the SEC filing, the fund is seeking $100 million in limited partner commitments. However, a Rustic Canyon newsletter has indicated that the fund could be looking for as much as $150 million.

Unlike Rustic Canyon (the venture shop), the new fund is a later-stage private equity vehicle that will make investments of between $3 million and $10 million.

The firm will target businesses in the emerging domestic market (EDM), which is an investment strategy designed to capitalise on the growth in certain minority markets in the US.

The EDM strategy of investing has spawned a number of new groups that are dedicated to this market, with many targeting the Hispanic market specifically. Linea Capital, Nogales Investors, Hispania Capital and Palladium Equity Partners are among those that focus on investments in this space.

The Rustic Canyon / Fontis fund, meanwhile, has already closed its first deal, investing in Meximarica Media Inc., the parent company of Spanish language newspaper Rumbo.