Goldman Sachs Veteran to Head Bregal’s $500 Million Investment Vehicle

by Tamika Cody, FORTUNE

Gene Yoon will help steer Bregal Sagemount toward growth-oriented investments within the business service, software and technology space.

Bregal Investments placed former private equity head of Goldman Sachs & Co., Gene Yoon, in the driver seat to lead its latest direct investment platform, Bregal Sagemount I LP.

The newest fund, which has $500 million in committed capital, will be used to invest in growth-oriented companies in the business services, software and technology-enabled services, and the information market.

Bregal Investments fronted most of the capital and partners at Bregal Sagemount also contributed an undisclosed amount to the fund.

“We are very excited,” says Yoon. Joining Bregal Sagemount was the next logical step in his career, he adds. Yoon went from being one of a handful of general partners at Great Hill Partners LLC in Boston to Goldman Sachs, where he launched the private equity division for the firm’s special situations group in 2007.

“That was obviously a very intriguing, unique, and entrepreneurial opportunity.”

Bregal Sagemount intends to spend $15 million to $75 million on investments. It also has the ability to invest up to $150 million with the help from Bregal Investments. The media, financial services and healthcare sectors are ideal opportunities, but Yoon says the firm plans to stick to its core interest within business services, software and technology-enabled services, and the information market.

“Those are really the bulk of where our investing activity has been for the last 12 years between Great Hill and Goldman.”

Bregal Sagemount has yet to make its first investment, but Yoon says “the pipeline looks pretty healthy.” The firm is currently working on a few projects and should close their first deal in the next couple of months.

Yoon, 37, acknowledges that the private equity market is going through turbulent times, but he is not going to allow it to be an obstacle. Funds are struggling with generational issues, some are trying to decide if they will raise another fund, and others are losing partners to retirement. “There’s quite a bit of dislocation that makes a natural opportunity to really pick up some A plus talent in the marketplace,” says Yoon.

Yoon also chimed in on the debate currently circling around the private equity market, and what its role is in the economy.

“I think there needs to be a distinction that the entire industry doesn’t go out and buy conglomerates, chop them up, whack the headcount of companies and then sell them at a gain at the employee-based expense.” He is cognizant that there are certain firms that do apply that methodology to drive their returns.

“The predominance of the industry, including Bregal Sagemount, the strategy is to really drive our returns for our shareholders through growth, which tends to come through labor increase,” he added. “As an industry I think it’s important to understand that there are firms out there that do promote growth.”

Given that Bregal Sagemount is a brand new fund, Yoon says it should not be too much of a problem to stand out from the rest of the middle-market private equity players. “We have an interesting advantage in that we don’t have a legacy portfolio to manage. We can purely focus on business development and help our portfolios grow.”

Kirkland & Ellis LLP handled legal matters on the fund with John O’Neil and David Sherman as the lead attorneys.

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