HCI Equity Partners


HCI Equity Partners is a Washington, DC-based private equity firm with offices in Minneapolis, MN and Chicago, IL as well.

History

Thayer Capital Partners

The founding date of Thayer Capital Partners has been variously listed as 1991, 1993, and 1994 but sources are consistent that it was founded in Washington, DC. From its founding up to 2004 Thayer invested in over 30 portfolio companies with total revenue in excess of $3 billion.
The company was named after Sylvanus Thayer, an early superintendent of the United States Military Academy who is widely considered to be the “Father of West Point.” Thayer's founder, businessman and politician Fred Malek, is a graduate of USMA. After a number of legal and financial incidents in 1999 and 2000 a large number of managing partners left the firm. In 2004 Malek changed his title to "chairman and founder" from "managing partner,” Malek said of the change "I don't intend to just pursue a hobby as a baseball owner. I intend to be chairman and partner of Thayer for the rest of my life.” Thayer Capital Partners was known for using its close political connections to engage in “access capitalism.”

Thayer | Hidden Creek

Founded in 1989 Hidden Creek Partners was an industrial management company specializing in the automotive sector based in Minneapolis, Minnesota. In 2003 Hidden Creek co-founder Scott Rued joined Thayer as a Managing Partner. In 2004 Hidden Creek became intimately involved in Thayer's operations. Hidden Creek was acquired by Thayer Capital Partners in 2005. As part of the deal the firm changed its name to Thayer | Hidden Creek and Hidden Creek Partners co-founder, president and CEO, Scott Rued became a managing partner.

HCI Equity Partners

In 2011 the "Managing Partners and investment team” of Thayer Hidden Creek formed HCI Equity Partners "to assume the management of the funds and operations of Thayer | Hidden Creek Partners.”

Current operations

In 2017 HCI Equity Partners closed a new $400M fund, Fund V. The fund has an activation date of January 2018. In December 2018 HCI Equity Partners V acquired the Liverpool, NY based hose assembly firm JGB Enterprises which specializes in supporting the fracking industry. In 2018 it was reported that HCI’s portfolio was 60% Industrial and 40% Transportation & Logistics.

Major positions

Involvement in Connecticut political corruption

In 2004 the US Securities and Exchange Commission filed a complaint against Thayer for their role in the racketeering case of former Treasurer of the State of Connecticut Paul J. Silvester. The SEC report says that in November 1998 Silvester requested that Thayer's chairman, Frederic V. Malek, hire his good friend William DiBella as a lobbyist. DiBella was paid 0.7% of the value of any investment the Connecticut State Retirement and Trust Fund placed with Thayer, this amounted to $374,500 over the course of the scheme. The SEC contended that DiBella "ultimately performed no meaningful services in connection with the Thayer IV investment and Thayer, TC Partners IV, TC Management IV, and Malek failed to take adequate steps to determine what services, if any, the Treasurer's Associate would, or actually did, perform in connection with that investment." According to the New York Times in 1999 Silvester "pleaded guilty to six acts of racketeering, including three instances of bribery and one count of conspiring to launder money” and agreed to cooperate with federal investigators in their case against DeBella and Thayer.
On May 18, 2007, a federal jury found DiBella and his business North Cove Ventures "liable for aiding and abetting Silvester's intentional violations of Section 10 of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the negligent violations by Malek, Thayer and its affiliates of Section 206 of the Investment Advisers Act of 1940. In its decision of March 13, 2008, the court reaffirmed the jury's findings."

Roadrunner Transportation

Thayer acquired shipping firm Roadrunner Transportation in 2005. Thayer initially shot for a 2008 public offering but reconsidered due to the general economic condition. In 2010 they took Roadrunner public and the firm continues to sell off its shares, in 2015 they sold 2 million shares worth $49,500,000. In 2018 two former Roadrunner Transportation controllers where indicted on charges of securities and accounting fraud occurring between 2014 and 2017 which caused alleged damages of over 245 million USD to buyers of Roadrunner Transportation stock.

Tribar PFAS pollution

In 2015 HCI Equity Partners acquired Michigan auto parts supplier Tribar Manufacturing. in 2018 Michigan regulators took action against Tribar for violating water pollution statures. The pollution set a new record of 5,500 parts per trillion of PFAS, recorded in Norton Creek, well over the regulated level of under 12 parts per trillion. Fish in "Kent Lake; the Huron River; Hubbell Pond in Oakland County; and Ore, Strawberry, Zukey, Gallagher, Loon, Whitewood, Base Line, and Portage Lakes in Livingston County.” where found to be far too contaminated for human consumption and as such the state issued a fish advisory for these areas. Tribar also operates in the area as Adept Plastic Finishing Inc. which was acquired by HCI in 2016. Officials noted that the companies had already ceased use of PFAS but that the pollutant remained in their system because it is highly persistent, which is one reason it is so damaging to the environment.

Investors

In 2011 investors included Boeing, Hamilton Lane Advisors, and the Michigan Department of Treasury.

People