Meilner emphasized that Bridge Street will not become involved in start-ups, saying traditional venture capitalists would be better suited for such investments.

“We want to hit the singles and doubles, we want to hit them in the corners, in the gaps,” he said. “If we clear the fence, that’s great, but we want to make sure that we have a better risk-return measure. Many venture capitals try to hit the ball out of the park, and if they are successful on one of those, it carries the entire portfolio.”

Part of Bridge Street’s strategy is that every investment must have some minimum control levers.

“Our fund represents investors. We need to be able to ultimately exit that investment when we feel it is the right time,” Meilner said. “Obviously we will be working with management teams and anyone else, but everyone will know exactly what the game plan is when we go into that investment. Ultimately, we need to be able to liquidate our investment at some point in time in the future.”

He said Bridge Street looks for short-term involvement. It plans to make six to 12 investments over the course of the next four or five years, and after deploying the capital; the intention is to exit each venture over a similar time period. Meilner expects that a good number of the liquidations will be done with a larger private equity firm as the benefactor.

Not only does Bridge Street have a specified time period to generate returns for its 32 investors, but it also has additional concerns for success. Meilner, Kaczynski and fund board members John Kennedy, of Autocam Corp., Michael Jandernoa, formerly of Perrigo Co., and George Jackoboice Jr., of Monarch Hydraulics Inc. account for a full 20 percent of the over $30 million in capital raised to date. “We’re investing our money side by side,” Meilner said. “There are many points of alignment between us and the investments. Unlike managing partners of other funds, who make $20 million no matter if the fund performs or not, for Bill and I to make anything near what we’ve made historically, the fund has to be successful.”

Jandernoa and Kennedy have given equity shares of their companies to private equity investors in recent years. Autocam is currently being acquired from Aurora Capital Group by a partnership of other investors, Kennedy amongst them.

Over half of Bridge Street’s current opportunities are within the state of Michigan, with the other half dispersed amongst the Great Lakes region. It will not pursue opportunities outside the Great Lakes. The majority of opportunities have been within manufacturing though others have been consumer products, technology and health care. BJX

GRAND RAPIDS BUSINESS JOURNAL