Lion Cao has built a diverse portfolio designed to provide solid returns in any financial environment. Our portfolio is a balanced mix of direct investments, co-investments and private equity funds.
Maritime Equity Partners
Co-Investment with Oaktree Capital Management and Peter C. Georgiopoulos
Maritime Equity Partners (MEP) is an investment platform managed by leading shipping operator, Peter Georgiopoulos, and his team to make opportunistic investments in the maritime sector. To date, MEP’s investors – Oaktree Capital Management, Lion Cao Private Equity Maritime and Peter Georgiopoulos – have made three fleet acquisitions of dry bulk vessels, which total approximately $500M of transaction value and comprise 12 vessels of various sizes.
MEP is structured to invest directly in opportunities in the international shipping industry at a time when vessel values and rates are at cyclical lows. MEP deploys its fleet on time charters, opportunistically, with high quality counterparties. MEP has the dual goals of capturing current, progressively greater income as charter rates increase over time while ultimately realizing significant appreciation in the underlying asset value of the vessels with an overall economic recovery.
Mr. Georgiopoulos is a 20-year veteran in the shipping industry and has executed on this investment approach twice in the past when worldwide market conditions caused a similar collapse in the shipping markets. In each case, he realized returns of 7x ROI for his investors, including Oaktree. Mr. Georgiopoulos is currently the Chairman of Genco Shipping & Trading Ltd., General Maritime Corp., Aegean Marine Petroleum Network, Inc., and Baltic Trading Limited.
Lion Cao has committed $64M to the MEP strategy through its vehicle, Lion Cao Private Equity Maritime LLC.
Co-investment with JC Flowers & Co.
IndyMac was a prominent West Coast bank with 33 branches in Southern California and over $6BN in deposits. In March 2009, a consortium, including Steve Mnuchin of Dune Capital, JC Flowers & Co. (JCF), and Paulson & Co. acquired 100% of IndyMac for $13.9B. The consortium invested $1.6B in equity to capitalize the new bank; JCF and its co-investors including Lion Cao invested $400M.
After the acquisition, the name IndyMac was changed to OneWestBank, FSB (“OneWest”) and it remains the country’s 6th largest mortgage servicer, servicing $153B third-party loans including Fannie Mae, Freddie Mac and private investors, as well as a major reverse mortgage loan serving platform, with over $20B of assets. The consortium was granted an attractive loss-sharing arrangement with the FDIC for the bank’s assets, which provides investors in OneWestBank attractive downside protection as well as the ability to grow with the assets of the bank. Through its relationship and investment in JCF, Lion Cao was able to secure its full allocation in this oversubscribed deal and co-invested with its partners in this transaction.
Co-Investment with a well-known $20B investment fund
Lion Cao co-invested alongside this group in an $18.5M investment to complete the production financing of FoodFight!, an animation full-feature single-picture produced Larry Kasonoff and Josh Wexler and starring Charlie Sheen, Hilary Duff and Eva Longoria. The producers have a track record of success in film production and franchise merchandising, including the $4BN+ franchise of Mortal Kombat, the Terminator series, True Lies and Dirty Dancing. The producers had secured over $100M in non-recoupable marketing and advertising promotional tie-ins to support the film’s launch, which had never been accomplished before and is unique. Investors’ original principal investment has already been recouped, with the equity ownership stake of 25% in the picture still to be realized.
POW! Entertainment (POW!) is the holding company for Stan Lee, the iconic creator of such comic book characters as Spiderman, X-Men, The Hulk, Fantastic Four, Iron Man, Captain America and others. Lion Cao has established a joint-venture with POW! in a variety of concepts, including the development of comic book properties that will eventually also develop into film, television and digital properties. As a JV partner, Lion Cao will structure the financing, production, publication and distribution of the comic books as well as other projects. Lion Cao is currently also developing a partnership with a India-based animations studio for the creation and distribution of Stan’s content internationally. Lion Cao’s principal coinvested with partners in the fund.
Ajia Partners (Ajia Asian Opportunity Fund – Joint-Venture)
Ajia Partners (“Ajia”) is an investment firm originally backed by 18 wealthy families in Asia and is focused on alternative investments throughout Asia. Ajia manages over $2BN across five sectors: real estate, special situations/private equity, hedge funds, Asian hedge fund-of-funds and corporate advisory. Ajia Partners’ strategic partners include ABN AMRO, Mitsubishi Corporation, China Securities, Woori Bank, BNP and Goldman Sachs. A Lion Cao principal coinvested with partners in the fund.
ABRY ASF I, ABRY ASF II, ABRY VI, ABRY VII
ABRY is a Boston-based buyout fund founded by Andrew Banks (“AB”) and Royce Yudkoff (“RY”), originally from Bain Consulting in 1989. ABRY focuses on control investments in media, communication and information industries where it has substantial operating and investment experience. ABRY pursues a range of transaction types including acquisitions, growth investments, consolidation strategies, cost reductions and turnarounds and will generally take controlling positions in portfolio companies in order to exert requisite influence over the its investments. ABRY has six private equity funds, two mezzanine funds and a fund focused on senior loans of media companies. ABRY’s track record has been excellent: the group has generated over 45% net IRR and 4X ROI, on average, across five funds. Lion Cao has co-invested in the last 18 months with partners in two new ABRY funds: Fund VI and ABRY ASF, a senior securities fund.
Sun Capital Partners was founded in 1995 by Mark Leder and Rodger Krause to invest in distressed / turnaround buyout situations across a variety of industries. Sun makes control investments in companies with strong market positions or franchise value, but with poor performance, significant operating challenges, inadequate or incomplete management or in out-of-favor industries. Sun targets companies up to $5BN+ in revenues, though typical transactions are with businesses that have $50M to $500M in sales. Sun has five private equity funds that have each generated excellent returns. IRR and ROI over the first three funds, on average, has been 96% and 3.6x ROI, respectively. Fund IV and Fund V have not yet been realized. A Lion Cao principal seed-funded Mark and Rodger coinvested in their pre-fund transactions, invested in each fund, and co-invested in Fund V with our partners.