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J.W. Childs Founder Is ‘Muzzled’ After Prostitution Ring Charges

John Childs has stepped down as chairman of private equity firm J.W. Childs Associates, after being charged in a prostitution sting in Florida.

The founder of J.W. Childs Associates has retired after being ensnared in a police investigation involving prostitution at massage parlors in Florida.

John Childs, 77, has been charged with soliciting prostitution, according to a presentation on “human trafficking in Indian River County” posted on the Vero Beach police department’s website. The county’s sheriff’s office says on its website that a warrant for Childs was issued February 18, listing an address in Indian River Shores, Florida.

“At the moment I’m muzzled by my lawyers,” Childs, chairman of J.W. Childs, said Monday in an email. He did not immediately respond to a follow-up request for the contact details of his attorneys.

The private equity firm announced Monday evening that Childs has stepped down as chairman of J.W. Childs and as a director of the board at KeyImpact, a company owned by the firm's Fund IV. He was not actively involved in the management of J.W. Childs, which will continue to be led by managing partner Adam Suttin and partners David Fiorentino, Jeff Teschke, and Bill Watts, according to the announcement.

Philippe Schenk, a managing director in investor relations at J.W. Childs, didn’t return a phone call seeking comment about the charges. A spokesperson for the firm didn’t immediately provide comment on the allegations against Childs.

One of the slides posted February 21 on the Vero Beach police department’s website shows 165 people have been charged with soliciting prostitution. Twenty-five of the subjects ranged in age from 70 to 84.

Childs founded the Waltham, Massachusetts-based private equity firm in 1995, investing about $3.7 billion in more than 50 businesses since then, according to its website. Exited deals include Meow Mix, Equinox, and Mattress Firm, its website shows.

J.W. Childs said in September that it bought Walker Edison, a supplier of affordable home furnishings, for undisclosed terms. The acquisition was made with its fifth fund, according to the private equity firm’s website.

More than a year ago, J.W. Childs Equity Partners V was seeking to raise $500 million, according to a December 2017 filing with the Securities and Exchange Commission.

In 2014, the Canada Pension Plan Investment Board said it agreed to commit $119 million to the firm’s fourth fund, which at the time was aiming to raise $450 million. The pension also invested in its third fund through the secondary market, according to the statement.

A document on CPPIB's website does not list J.W. Childs among its private equity relationships as recently as September 30.

A spokesperson for CPPIB didn't immediately respond to an email and phone call seeking comment on its relationship with J.W. Childs. 

David Eager, the executive director for Kentucky Retirement Systems, said in a phone interview that its pension and insurance funds invested a total of $40 million in J.W. Childs’ third fund in 2002. The investments have produced an internal rate of return of more than 15 percent, he said. 

The retirement system has a residual investment of $2,112 with the private equity firm, according to Eager, who said the pension took a pass on contributing to subsequent funds raised by J.W. Childs.

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