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Fund Management and Fiduciary Services

Replacement General Partner to High-Tech Focused Venture Capital Fund

The Engagement

An affiliate of Conway MacKenzie was appointed and is currently serving as the replacement general partner for a $125 million middle market high-tech focused venture capital fund following a for-cause removal of the fund’s former general partner.

Our Role

In our role as general partner, we are broadly responsible for maximizing value for the fund’s limited partners, including, without limitation:
  • Ensuring an orderly transition of the role of general partner, including (i) securing all books, records and other property of the fund from the former general partner, (ii) transition of board representations and (iii) stabilizing relationships with portfolio company management teams and other stakeholders;
  • Providing transparency to the fund’s stakeholders regarding the partnership’s financial condition and the value of the fund’s investment portfolio under various scenarios;
  • Providing strategic oversight, corporate governance and shareholder activism with respect to the fund’s portfolio companies;
  • The structuring, negotiation and documentation of a capital raise to provide necessary liquidity to the fund;
  • Execution of value maximizing portfolio company liquidity events; and
  • Performance of a financial forensic investigation regarding the fund’s financial affairs, and the evaluation and prosecution of potential claims for the benefit of the fund’s limited partners and the pursuit of other potential recovery actions.
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Replacement General Partner to Middle Market Buyout Fund

The Engagement

An affiliate of Conway MacKenzie was appointed and is currently serving as replacement general partner to a $125 million late stage middle market private equity fund following a for-cause removal of the fund’s former general partner.

Our Role

In our role as general partner, we have been broadly responsible for maximizing value for the fund’s limited partners, including (i) the provision of strategic oversight, governance and restructuring advice to portfolio companies through active BOD representation and the exercise of our shareholder rights, (ii) identification and execution of liquidity events, and (iii) the performance of fund administrative responsibilities.

The Result

Our efforts as general partner have resulted in value creation for the fund’s limited partners through the following initiatives, without limitation:
  • Negotiation of the sale of a portfolio company to a strategic buyer, representing an approximate 20x multiple of historical earnings for a business that had recently experienced significant profitability and liquidity challenges and defaults with its existing lenders;
  • Assistance with the positioning of a portfolio company for sale and the negotiation of a merger transaction with a strategic buyer at a valuation that represented an approximate 11x multiple of historical earnings for a business that recently suffered from significant customer attrition and an inability to demonstrate meaningful organic growth;
  • Led negotiations to monetize certain special shareholder consent rights in connection with the sale of a distressed portfolio company, which provided meaningful consideration to the consent holders notwithstanding the fact that the transaction did not yield sufficient consideration to satisfy all of the company’s debt obligations.
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Interim General Partner to Middle Market Buyout Fund

The Engagement

An affiliate of Conway MacKenzie recently served as interim general partner for a $120 million late-stage middle market private equity fund following a no-fault removal of the fund’s existing general partner.

Our Role

Our role broadly consisted of undertaking such actions as necessary to maximize value for the fund’s limited partners, including but not limited to (i) the assessment of strategic alternatives available to the fund’s limited partners, (ii) the provision of governance and oversight for the fund’s eight portfolio companies and  (iii) assistance with the identification, evaluation and execution of various financial restructuring, performance improvement and other strategic initiatives to enhance the value of the fund’s investment portfolio.

We led efforts to structure, negotiate and execute a special capital raise and a process to implement an amendment to the fund’s partnership agreement to provide liquidity necessary to preserve and enhance the value of the fund’s investment portfolio.

The Result

Through Conway MacKenzie’s litigation support and forensic accounting expertise, we also identified, evaluated and quantified significant potential claims for the benefit of the limited partners and served as consulting expert for the fund in related litigation.  We also led efforts to successfully enforce the fund’s rights under the terms of a court stipulated settlement agreement following breaches by the removed general partner in the Delaware Court of Chancery.

We estimate that the NAV of the fund’s investment portfolio improved by approximately 30% during our tenure as general partner.

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Forensic Investigator to Municipality in Connection with Alternative Investments

The Engagement

Conway MacKenzie was engaged by one of the largest municipalities in the United States with respect to certain of its pension fund investments that were managed by a general partner that disbanded, leaving the underlying investments at risk. The related investment funds had approximately $115 million of assets under management that Conway MacKenzie was responsible for investigating.

Our Role

Our role centered on assisting the municipality and a newly selected replacement general partner with (i) conducting forensic analysis to assess the extent to which funds were utilized in conformity with the underlying partnership agreements, (ii) conducting an assessment of potential claims against the general partner, and (iii) assisting the replacement general partner in the transition of the fund from the former general partner.

In addition, we performed a detailed assessment surrounding other key provisions of the funds’ partnership agreements to determine whether those provisions were adhered to by the former general partner.

The Result

Conway MacKenzie provided transparency into the historical operations of the funds and assisted in the recovery of approximately $6 million of assets for the benefit of the partnership’s investors, as well as the identification of other potential claims.
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