The Cypress Group is a
private equity
In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a ty ...
company focused on
leveraged buyout
A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money (leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loan ...
investments in companies across a range of industry sectors. At its peak in the late 1990s and early 2000s, Cypress was among the largest US private equity firms, although by the end of the decade the firm would find itself in the process of winding down its operations.
[Cypress Group Faces Vote For Survival]
New York Post, August 7, 2009
The firm, based in
New York City
New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
, was founded in 1994 by the four senior members of
Lehman Brothers
Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before Bankruptcy of Lehman Brothers, filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Gol ...
' merchant banking group, Jim Stern, Jeff Hughes, Jamie Singleton and David Spalding.
[Lehman, Seeking Higher Profit, Returns to Merchant Banking](_blank)
New York Times, November 12, 1996
Cypress has raised approximately $3.6 billion since its inception across two funds raised in 1996 and 1999.
History
The Cypress Group was founded in 1994 by Jim Stern, Jeff Hughes, Jamie Singleton and David Spalding, who had served previously as the senior managing directors of
Lehman Brothers
Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before Bankruptcy of Lehman Brothers, filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Gol ...
' merchant banking group.
The four founders were responsible for restarting Lehman's merchant banking efforts after the departure of
Pete Peterson
Douglas Brian "Pete" Peterson (born June 26, 1935) is an American politician and diplomat. He served as a United States Air Force pilot during the Vietnam War and spent over six years as a prisoner of the North Vietnamese army after his plane w ...
and
Stephen A. Schwarzman to found
The Blackstone Group
Blackstone Inc. is an American alternative investment management company based in New York City. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate bu ...
, a private equity and investment banking firm.
The Cypress Group raised its first institutional private equity fund in 1996 with $1.05 billion of investor commitments.
In 1999, the firm completed fundraising for Cypress Merchant Banking Partners II, with $2.5 billion of investor commitments. At the time it was raised, the firm's new fund ranked among the largest raised for leveraged buyout transactions. Ultimately, Cypress II would prove to be the firm's final fund when it announced in 2007 that it would abandon further plans to raise a successor fund.
[Winding down at Cypress Group]
Wall Street Journal, June 18, 2007
Cypress had indicated its intentions to raise $1.5 billion. However, a series of weak investments, particularly in Cypress II, severely impacted the firm's plans to raise a third fund. By 2007, Cypress had lost a significant number of its senior investment professionals.
[ As of 2009, the firm is still managed day-to-day by two of its original founders, Jim Stern and Jeff Hughes. David Spalding assumed a role at his alma mater ]Dartmouth College
Dartmouth College (; ) is a private research university in Hanover, New Hampshire. Established in 1769 by Eleazar Wheelock, it is one of the nine colonial colleges chartered before the American Revolution. Although founded to educate Native A ...
and Jamie Singleton still remains on the firm's board.
In October 2009, the firm's Cypress Merchant Banking Partners II will reach the end of its original 10-year term. While the firm is seeking to extend the life of the fund, investors in the fund are currently negotiating an orderly wind-down of the investments in the portfolio.[
]
Investments
Since inception in 1994, Cypress has invested more than $4 billion of equity in more than 30 companies through transactions totalling in excess of $22 billion in size. Historically, Cypress employed an industry-based investment strategy and the firm was structured into six industry groups covering large segments of the economy, including:
* Packaging, Building Products, Construction Materials & Retail
* Automotive & Aerospace/Defense
* General Industrial & Services
* Healthcare & Financial Services
* Media & Entertainment, Lodging & Leisure
* Consumer Products
Among the firm's notable investments include:
*Affinia Group
Mann+Hummel Gruppe is a family-owned manufacturer of liquid and air filter systems, intake systems and cabin air filters headquartered in Ludwigsburg, Baden-Württemberg, Germany.
History
Adolf Mann and Erich Hummel were the heads of the Stuttgar ...
* Amtrol
* Catlin Group
*Cinemark Theatres
Cinemark Holdings, Inc. (stylized as CineMark from 1998 to 2022 and CINEMARK since 2022) is an American movie theater chain that started operations in 1984 and since then it has operated theaters with hundreds of locations throughout the America ...
*Cooper Standard
*Financial Guaranty Insurance Company
Financial Guaranty Insurance Company (FGIC) is an American monoline bond insurer established in 1983. It faced significant financial difficulties in 2008 which affected its ability to write new business.
The firm was acquired in December 2003 ...
*Frank's Nursery & Crafts
Frank's Nursery & Crafts was an American retailer devoted to the sale of lawn and garden products. It operated a chain of stores, with 170 outlets across 14 states. It specialized in products such as shrubs, trees, accent plants, flowers, and l ...
*Infinity Broadcasting Corporation
Infinity Broadcasting Corporation was a radio company that existed from 1972 until 2005. It was founded by Michael A. Wiener and Gerald Carrus. It became associated with popular radio personalities like Howard Stern, Opie and Anthony, Don Imus an ...
*Lear Corporation
Lear Corporation is an American company that manufactures automotive seating and automotive electrical systems. In 2019, it ranked #147 and in 2018, it ranked #148 on the Fortune 500 list.
Early stages
Lear Corporation was launched as American ...
* Loral Aerospace Holdings
*McBride plc
McBride plc () is a leading British-based manufacturing business, noted as being Europe's biggest maker of retailer own brand household goods. The business also provides contract manufacturing for brand owners.
It is listed on the London St ...
*Meow Mix
Meow Mix is a variety of dry and wet cat food known for its advertising jingle. It is a product of The J.M. Smucker Company as of March 23, 2015. Meow Mix was introduced in 1974 and sells many flavors, including Original Choice and Seafood Medl ...
* R.P. Scherer Corporation
*Republic National Cabinet Corporation
*Scottish Re Group
*WESCO International
WESCO International, Inc. is an American publicly traded Fortune 500 holding company for WESCO Distribution, a multinational electrical distribution and services company based in Pittsburgh, Pennsylvania.
WESCO International, Inc. is a provid ...
*Williams ScotsmanWILLIAMS SCOTSMAN SALE SET FOR $675 MILLION
New York Times, April 15, 1997
References
External links
The Cypress Group
(company website)
{{Private equity and venture capital
Financial services companies established in 1994
Private equity firms of the United States