Fenway Partners is a private equity firm specializing in middle market, growth capital, leveraged buyouts, and industry consolidation. The firm also seeks add-on acquisitions and industry consolidations for its existing portfolio companies. It focuses mainly on two sectors including consumer branded products, logistics, and value-added distribution. The firm typically invests in the United States. It prefers to make equity investments ranging between $20 million and $100 million in companies with sales between $75 million and $750 million, enterprise value between $100 million and $600 million, and EBITDA between $10 million and $100 million. The firm primarily invests in markets with low cy...
152 West 57th Street
New York, NY 10019
Founded in 1994
SEC Charges Fenway Partners LLC and Four Executives with Failing to Disclose Conflicts of Interest
Nov 5 15
The Securities and Exchange Commission announced that a Fenway Partners LLC and four executives have agreed to settle charges that they failed to disclose conflicts of interest to a fund client and investors when fund and portfolio company assets were used for payments to former firm employees and an affiliated entity. An SEC investigation found that Fenway Partners LLC, principals Peter Lamm and William Gregory Smart, former principal Timothy Mayhew Jr., and chief financial officer Walter Wiacek weren't fully forthcoming to the client and investors about several transactions involving more than $20 million in payments out of fund assets or portfolio companies to an affiliated entity for consulting services and to Mayhew and other former firm employees for services they primarily provided while still working at Fenway Partners. According to the SEC's order instituting a settled administrative proceeding: Fenway Partners entered into contracts with certain portfolio companies held by Fenway Capital Partners Fund III L.P. under which the companies paid fees to Fenway Partners that were offset against the management fees the firm earned from the fund. Beginning in December 2011, Fenway Partners and the four executives caused certain portfolio companies to terminate their payment obligations to Fenway Partners and enter into consulting agreements with an affiliated entity named Fenway Consulting Partners LLC. Fenway Consulting Partners provided similar services to the portfolio companies often through the same employees, but the fees paid to Fenway Consulting Partners (totaling $5.74 million) were not offset against the management fees that the fund paid to Fenway Partners. Fenway Partners, Lamm, Smart, and Wiacek asked fund investors to provide $4 million in connection with an investment in a portfolio company without disclosing that $1 million would be used to pay Fenway Consulting. Fenway Partners, Lamm, and Mayhew caused Mayhew and two former Fenway Partners employees to receive $15 million in incentive compensation from the sale of a portfolio company for services that they had almost entirely provided when they were Fenway Partners employees. Fenway Partners also failed to disclose these payments as related party transactions in the financial statements they provided to investors. To settle the SEC's charges without admitting or denying the order's findings, Fenway Partners, Lamm, Smart, and Mayhew agreed to jointly and severally pay disgorgement of $7.892 million and prejudgment interest of $824,471.10. They and Wiacek also agreed to pay penalties totaling $1.525 million. The total amount of $10,241,471.10 will be placed into a fund for harmed investors. The SEC's investigation was conducted by Mark D. Salzberg and Gregory Maccordy of the Asset Management Unit along with Kevin McGrath, Neal Jacobson, and Lisa Knoop of the New York Regional Office. The case was supervised by Panayiota K. Bougiamas of the Asset Management Unit.