New Dawn Rising in Cleveland

A change in thinking seems to be taking place in the Cleveland private equity market. The realization that there is money to be made by selling unwanted businesses to private equity houses is eroding the suspicion that surrounds the industry.

Corporate and family shareholders who either do not want to, or cannot, face up to the changes that are needed to ensure a viable economic future see the attractions of private equity.

Prime One Capital, a Cleveland-based private equity group, said in the first three months of the year, Cleveland private equity firms raised more funds and invested in more companies compared with the same period last year. Investors are regaining confidence in Cleveland as an economic location, said Phillip Racine, of Prime One Capital.

Much progress has been achieved in improving the image of private equity in Cleveland but a good deal of work remains to be done to enhance the understanding and appreciation of the industry.

Racine said: “Private equity is like maintaining a beautiful bonsai tree. If you don’t look after it properly, it grows out of shape. The private equity process helps companies to concentrate on growing again. This is not economically damaging – this is adding value.”

The reality is that private equity is here to stay in Cleveland and everyone knows it.