Ryan Bailey — the former head of Children’s Health endowment — has partnered with three longtime associates to start a fundraising firm for emerging private-equity managers.
Pacenote Capital formally launched Monday, the company told Institutional Investor. Bailey’s partners are Bill Braxton, Matthew Evans, and Casey Peters.
The firm, headquartered in New York and Dallas, responds to a need its founders said they’ve heard from institutional allocators: new relationships with high-quality investment teams in private equity, “who aren’t broadly known in the institutional marketplace yet,” the firm said in a statement.
Pacenote, according to the statement, “will work with spinout teams, independent sponsors, and other more nuanced situations where mature teams are setting out under their own flag.”
Several unusual qualities are worth noting about Pacenote. Having an institutional investment head at the helm is one. Its ties to the family office world are another.
The company already has a “strategic partnership with a highly regarded single family office whose private markets mandate is currently focused on direct deal opportunities with independent sponsors.” Pacenote wouldn’t disclose the name of the family office, but the sector has been souring on fund-based investing in favor of direct deals. The arrangement saves on fees, but sourcing those deals is a major hurdle for many wealthy families’ investment arms.
One of Pacenote’s three board members is Bo Ramsey, head of private markets for single-family office Pendyne Capital. Pendyne reportedly runs money for the Collier family, Florida real estate magnates.
Heavyweights from the endowment and foundation world round out the board: Duke University’s retired private markets chief Alice Gould and former Texas Teachers’ chair David Kelly.
Bailey left Children’s Health in Dallas late last month, having built its investment office over the previous five years. At the time, he would not say where he was headed.
[II Deep Dive: Investment Chief Resigns from $2B Dallas Children’s Health Fund]
Children’s Health has not announced a successor for Bailey or if it plans to recruit one.
Bailey is leaving behind the powerful perch of being a pure institutional asset allocator. “I have nothing but the utmost respect, and frankly personal love for the Children’s organization,” he told II when asked about this transition. “But the prospect of exclusively focusing my time on sourcing and underwriting the next great private equity firms, and personally aligning myself with their future success, was too exciting to pass up.”
Pacenote aims to engage with upstart private equity teams early in their life cycles — a year or more before they start raising initial funds.
Over the next decade, it aspires to work with 20 or 25 “top-decile, highly sought-after” managers before they took off, partner Braxton said. “We want our Pacenote track record to be predicated on our managers’ outperformance both in terms of investment returns, but also in reputation as excellent partners, not how much capital we’ve raised.”