Profitable family businesses can face a cash crisis when it comes time to hand the reins to a new generation. Now, a trio of Grand Rapids area corporate leaders have put together a $30 million pool to help ease succession problems. Bridge Street Capital Partners LLC will invest in profitable mid- size companies needing cash to grow or to change ownership.

It is the brainchild of The Right Place and a committee that set out to solve the lack of private equity investors in West Michigan. Committee members recruited by The Right Place President Birgit Klohs include:

John C. Kennedy, chairman and chief executive officer of Autocam Corp.;

Michael J. Jandernoa, former chief executive officer at Perrigo Co.; and

George A. Jackoboice Jr., chief financial officer of Monarch Hydraulics Inc.

"There was an Inc. magazine article that said Grand Rapids was one of the best cities to do business, but it pointed out we had no private equity presence here," Jackoboice said. "That was the genesis of the discussion." Jandernoa and Kennedy had to go outside the region when their companies needed capital, Jandernoa said. "We felt there was an opportunity that was missing here in West Michigan," he said.

Initially, the committee worked to bring in a Detroit investment group, but soon faced a familiar dilemma -- whether to hire the experts or do it themselves. The Detroit firm wanted to "come here and put up their shingle," Jackoboice said, but they expected the local group to raise the cash and run things.

The committee decided to go it alone and created a private equity fund. "We were business owners, people who have been out there taking risks, building businesses, entrepreneurs who really feel strong about this area," Jackoboice said.

He, Kennedy and Jandernoa share a wealth of management experience, but they knew they needed professionals to run the fund. "What we really wanted was the two 'knows' -- know the private equity business and be known in West Michigan," Jackoboice said.

They recruited two managing partners, John J. Meilner, formerly with McDonald Investments in Grand Rapids, and William F. Kaczynski Jr., previously with Trivest Partners private equity fund. Kaczynski is based in Chicago.

Companies needing capital must be profitable and have good prospects for growth, Meilner said. "We're not turn-around guys. We don't invest in distressed businesses," he said.

The original committee has disbanded, Jandernoa said, but he lauded The Right Place for getting the ball rolling. Klohs was not available for comment Tuesday, but vice president Michelle Cleveland said the group was tapped for its broad investment experience. "They are deeply connected and committed to a thriving economy here," Cleveland said. "The group is very savvy."

© 2004 Grand Rapids Press. Used with permission