After serving as founding member of Bernhard Capital Partners, one of the fastest growing private equity firms on the Gulf Coast, New Orleans native David de Lauréal has launched his own firm and has raised $210 million from investors to back area industrial and infrastructure service sector businesses.
Carr’s Hill Partners, which closed its first fund earlier this month, targets regional family-owned and founder-led companies with earnings of between $5 million to $15 million. It's a sector that New York- and Silicon Valley-based firms have often overlooked and one where de Laureal sees untapped potential.
“The southeastern Gulf Coast is where we want to be, even if we were based in New York,” de Lauréal said. “The population growth, the industrial activity — these are all underlying positive trends that lift all boats.”
Carr’s Hill Fund is looking specifically at investing in sectors such as waste management, port and waterway infrastructure, transportation, logistics and utility services. Those are areas with outsized growth potential, according to de Laureal.
Investors apparently agree. Carr’s Hill set a $175 million goal for its initial fund but shot past its target in less than 10 months. A “highly sophisticated” group of investors put money into the fund, de Lauréal said, including university endowments, insurance companies, family offices and founders.
De Laureal believes that Carr’s Hill's targeted focus is among the reasons raising money for the initial fund was so, relatively, easy.
“Firms that are generalists, with multiple geographies, are a tougher pitch these days,” he said. “Investors want to see a different strategy.”
Carr’s Hill also had an advantage in the fact that it had already prefunded four companies: Matthews Brothers Dredging in Pass Christian, Mississippi; Axis Industries, a La Porte, Texas, business that provides industrial maintenance services; Arrow Waste, an Atlanta company that offers dumpster rentals; and Smart Safety Group, an Atlanta company that provides safety training and Occupational Safety and Health Administration compliance.
Those four businesses have grown substantially since Carr’s Hill invested in them over the past few years in terms of profits, employees and revenue, de Lauréal said.
The plan is to acquire and partner with five to seven similar businesses. The fund will pull "all levers of growth" for the companies it supports, de Lauréal said, including hiring employees for the sales, management and human relations side, purchasing equipment, expanding facilities and acquiring competitors. "We want to help professionalize a business, to allow it to grow," he said.
The ultimate goal for Carr's Hill is to get the operations of the companies it invests in to the point where they are taken over by a much larger owner.
Focus on the Coast
De Lauréal launched Carr’s Hill in 2019, after he was managing director and a founding member of Bernhard Capital, an energy services-focused private equity firm started by former Shaw Group CEO Jim Bernhard. Through his years at Bernhard, de Lauréal said he developed an operational minded approach toward investing in companies and how to build a team.
The Gulf Coast has not traditionally been known as a hub of private equity activity, but Bernhard Capital changed that when it was established in 2013. It is the largest private equity firm between Houston and Mobile, Alabama, with four funds managing about $4.4 billion in assets
Partnering with smaller, family-owned businesses is different than what Bernhard Capital does, which is invest in larger infrastructure, construction and utility companies, but de Lauréal said it suits the personality of his firm and offers an opportunity for greater returns.
De Lauréal grew up in a prominent New Orleans family with deep roots in the business community. His father, the late Martin de Lauréal was a senior executive with Stewart Enterprises, until the funeral service provider was acquired in 2013. His older brother, Martin de Lauréal Jr., is president of First Horizon Advisors; his younger brother, Jonathan de Lauréal, is a managing partner with Bernhard Capital.
David De Lauréal said he expects to start a second Carr’s Hill fund in the next five years or so.
“I really like what we’re doing here as a team,” he said. “I don’t think we’ll run out of targets.”
