New Private Equity Firm Born Of Goldman

Dec 6 2010 | 4:23am ET

Goldman Sachs has spun off a private equity group specializing in inner-city investing.

The Urban Investment Group was reborn last week as New MainStream Capital. The new firm has about $250 million in assets under management and was backed in the spin-off by Pantheon Ventures, which helped the new firm buy its old portfolio and which will be a significant investor in its fund.

Goldman has retained Urban Investment's real-estate business.

Like Urban Investment, New MainStream will focus on middle-market companies in healthcare, business services and food and consumer products. The firm specializes in companies it believes are poised to profit from the ageing and cultural diversification of the U.S. population.

The new firm is headed by Urban Investment's Kevin Jordan and Martin Chavez. It also features three members of Dallas-based private equity firm Haas Wheat & Partners, with co-founder Bobby Haas becoming chairman of its strategic advisory committee. Haas Wheat's two other general partners have also been named partners of the new firm, and MCCI Holdings CEO Jose Armas chairman of its operating executive committee. New MainStream has offices in New York and Dallas.

The spin-off has been in the works for some time. Jordan and Chavez considered raising a new fund for outside investors, but in August decided to seek secondary p.e. investors to buy the assets of its current fund.

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