Detroit‐based financial sponsor structures innovative secondary
transaction and raises its first institutional private equity fund
DETROIT–(BUSINESS WIRE)–Rockbridge Growth Equity, a Detroit‐based middle market private equity
firm (“Rockbridge”), completed a transaction in which a consortium of
blue‐chip institutional investors agreed to acquire an interest in four
existing portfolio companies and seed new platform investments.
Rockbridge will continue to manage the four businesses through a
newly‐formed continuation fund vehicle, RB Equity Fund I, L.P. (“Fund
I”). StepStone Group led the transaction. The consortium of
institutional investors also included Aberdeen Standard Investments,
HSBC, Lexington Partners and LGT Capital Partners.
In addition, Rockbridge has established RB Equity Fund II, L.P. (“Fund
II”), a newly-formed fund to continue Rockbridge’s strategy of making
control and minority equity investments in lower middle market services
businesses headquartered in North America. The initial Fund II investors
are the Fund I investors and an investment entity affiliated with Dan
Gilbert, which will become a Special Limited Partner in Fund II. Fund II
will continue to target growth-oriented investments across four core
industry verticals, including Digital Media & E‐commerce,
Technology‐enabled Products and Services, Fintech and Consumer Services.
Rockbridge was established in 2007 by Brian Hermelin and Kevin Prokop,
in partnership with Dan Gilbert. Since its inception, Rockbridge and its
affiliates have deployed approximately $590 million across 13 platform
investments. Rockbridge invests in fast‐growing service businesses that
can benefit from Rockbridge’s operational skills and its collaboration
with the Rock Family of Companies, including Quicken Loans and more than
100 other businesses.
Brian Hermelin, Co‐Founder of Rockbridge Growth Equity, said, “We are
excited to have the support of our strong group of institutional
investors as we enter a new phase in the evolution of our firm.”
Co‐Founder, Kevin Prokop, added, “Our vision has always been to create a
leading private equity firm based in Detroit focused on investing in
fast-growing services businesses across North America. This transaction
is a big step in reaching that vision.”
“We are thrilled to be in partnership with Rockbridge as the team enters
the next leg of its development. Brian, Kevin and the Rockbridge team
have demonstrated an ability to find and develop attractive lower middle
market growth companies, which is reflected in the high quality and
momentum of the Fund I investments. StepStone’s experience in similar
strategic and bespoke secondary transactions bolsters our confidence in
the Rockbridge team and assets,” said Thomas Bradley, Partner & Co-Head
of Private Equity Secondaries at StepStone Group.
Rockbridge was advised on the transaction by Lazard’s Private Capital
Advisory team, which is also acting as placement agent for Fund II.
Rockbridge received legal representation from Honigman LLP and Kirkland
& Ellis LLP. StepStone Group was advised by Ropes & Gray LLP.