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Private equity investors put $4 billion into LI companies

Sundial Brands CEO Richelieu Dennis. Last year, Boston-based

Sundial Brands CEO Richelieu Dennis. Last year, Boston-based Bain Capital took an undisclosed minority stake in Sundial Brands, an Amityville manufacturer of natural skin care and hair products used by African-Americans and others. Photo Credit: Uli Seit

Long Island companies received more than $4 billion in private equity investments last year, nearly $526 million less than in 2014, according to new figures.

The American Investment Council, a Washington, D.C.- based association representing private equity and growth capital firms, compiled the data for the four congressional districts that encompass most of Nassau and Suffolk counties.

In private equity, investment funds purchase a stake or full control of businesses. In some cases, the businesses are privately held or become so after the investment is made.

Council spokesman James Maloney said the 13 percent decline in new investments on Long Island between 2014 and 2015 “was not a significant drop.”

He said the high valuations of some companies discouraged investing last year.

“It is important to remember that the investments from earlier years are still active on Long Island, since private equity investments typically last three to seven years,” he said.

The roster of 2015 local deals includes:

  • Vector Capital of San Francisco purchased ChyronHego Corp., a broadcast graphics company based in Melville, for $120 million.
  • Boston-based Bain Capital took an undisclosed minority stake in Sundial Brands LLC, an Amityville manufacturer of natural skin-care and hair products used by African-Americans and others.

In New York State, private equity investors last year put $57 billion into 277 companies, according to the council’s report, published Tuesday. The state received the most investment dollars after Illinois and California.

In 2014, $43 billion was invested in 222 New York businesses.

Private equity investors are an important source of funding for companies that are beyond the startup stage but not yet large enough to sell stock to the public, said Richard Vogel, an economist and dean of Farmingdale State College’s business school.

“They are financing firms that have moved from the venture capitalists and are starting to become mature . . . but are not ready to go public,” he said yesterday. “Private equity provides the necessary capital for these companies to continue to expand.”

PRIVATE EQUITY ON LI

The value of new private equity investments in local companies fell last year compared with 2014.

2015: $4.1 billion in new investments*

2014: $4.6 billion in new investments*

Note: *Figures are for the four congressional districts that encompass most of Nassau and Suffolk counties.

SOURCE: American Investment Council

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