

The rest of the market may be in the dumps, but Catalyst Investors is having a good year. The mid-market growth equity firm plans to raise between $300 million and $500 million for its third fund this year and will probably have a comparatively easy time doing it, thanks to the nearly $250 million it distributed to investors in 2008 via three exits.
Catalyst owned 21% of MessageLabs Group, which Symantec bought from Catalyst and Madison Dearborn Partners for $695 million in October. The acquisition netted Catalyst nearly $146 million. The firm also profited from the sale of wireless spectrum owner Aloha Partners to AT&T for $2.5 billion last February and from selling a portion of its stake in Oneida Broadband to SprintNextel for an undisclosed amount last March.
Senior Writer Alexander Haislip asked Todd Clapp, Catalyst’s newest GP, six quick questions:
Q: What type of companies are you looking at?A: I’ve spent a lot of time in the past year and a half working in the datacenter space. One of our companies bought three datacenters over the past year. The company was actually the only deal we did this past year that met our valuation criteria. You’ve seen a lot of recent consolidation in this industry.
Q: What else?A: We’ve also looked at SaaS businesses. That’s an area we expect to see grow as well. It’s an area where you don’t have to apply a lot of leverage. We just sold a company in that space three weeks ago to Symantec.
Q: How are the companies you look at reacting to the recession?A: You’ve got the lag between seller’s expectations and where the market is trading. Someone doesn’t necessarily want to sell a company when they’ve seen multiples fall precipitously.
Q: How did you get the job at Catalyst?A: I joined Catalyst as a summer associate out of Columbia Business School. They actually were interviewing on campus and I knew one of the partners, who was a principal at the time. He and I went to high school together. He vouched for me.
Q: What do you like to do when you’re not evaluating investments?A: I have a baby on the way, coming in March. We’ve been getting ready for that. I have two dogs. We actually got a puppy in advance of the baby, which was crazy. We go to upstate New York and have a place up in the Adirondacks where we go hiking and fishing. My wife is a chef, so we go to the green market on the weekends and have a lot of dinner parties.
Q: A chef?A: She worked in a test kitchen for years at Martha Stewart, developing recipes and did it for five years and has a phenomenal repertoire. About nine months ago she took a job at Real Simple magazine and is the food editor there. She’s not working as a cook now, so when she comes home she actually wants to do it.