A Discussion with Bill Mulligan of Primus Capital: From Venture Capital to Private Equity Investing

A Discussion with Bill Mulligan of Primus Capital: From Venture Capital to Private Equity Investing

March 15, 2019

The Center For Free Enterprise hosted its latest sold out program on Friday, March 15, 2019 at The Racquet Club in Pepper Pike.

With 145 registrants, this was our most popular program yet. The momentum continues to build, as over 40 of the attendees indicated that they were attending their first CFE program!

Ben Calkins, of The Calkins Law Firm, Ltd., was the master of ceremonies and, after thanking the program’s sponsors, notably JP Morgan Wealth Management and Mixed Media & Design, Inc., and all attendees were given the opportunity to briefly introduce themselves, Ben Calkins turned the microphone over to the program’s host, David Brown of Red Hawk Associates.

Our featured guest and speaker was Bill Mulligan, Managing Partner of Primus Capital.

Bill is a graduate of Denison University and received his MBA from the University of Chicago.

Bill recalled how in the early 1980’s he worked first for First Chicago and thereafter for McKinsey and Company in its Cleveland office.

At that time, Cleveland Tomorrow, a group of Cleveland area based public companies and with a board comprised of their CEO’s, had recommended that the Cleveland Tomorrow member companies form a Cleveland based venture capital fund and that became Primus Venture Partners.

Primus raised $10 M from the Cleveland Tomorrow member companies and another $20 M from Ohio’s public employee pension funds.These pension funds had not invested in this type of thing before.

Loyal Wilson was brought in from First Chicago to run Primus, and one day he ran into Bill Mulligan on Concourse C at Cleveland Airport and they talked about the new fund that Loyal Wilson had been brought in to run.When Loyal Wilson’s initial hire backed out, after his wife refused to move from Los Angeles to Cleveland, Loyal Wilson hired Bill Mulligan to work with him at Primus.

Fund 1 had $30 M in it, and invested about $1 M in each of 30 companies, some startups and some more venture capital type investments.During the first 18 months, Primus had to make investments in Ohio but since then has not been geographically limited.

Well, so much for history. Recently Primus raised its Fund 8, with $540 M.

  • When Primus was started, $30 M was considered a mid sized fund.Today, $540 M is considered a relatively small fund.
  • When Primus started, it invested about $1 M per company. Today, Primus will invest about $30 M, the size of all of Fund 1, per company.
  • When Primus started, it had a geographical focus, on Ohio for the first 18 months, but no longer.
  • When Primus started, they made early stage investments. But no longer, as today they make growth stage investments in more established companies poised for growth.

Primus is typically a controlling investor, in 2/3 of its investments, and a minority investor in the other third. Typically Primus will have two of its representatives on the board of a business in which it invests.

Primus does has industry focuses, including health care (Steris was an early investment), and its staff consists of experts in the industries that Primus focuses on based both in Cleveland and in Atlanta.

Investors in Primus have done quite well, return wise, and Primus continues to raise new funds one after the other and is active making new investments.

The story of Primus is a great success story and is to some extent a story of Cleveland and Northeast Ohio and to some extent a story about venture capital and private equity investing and how it has changed over the past several decades. And change it has…..

Back then, venture and private investing were relatively new, investors were wary, investments modest in size, etc. Today, by contrast venture capital and private equity investing is all the thing, pension and other fund routinely allocate a portion of their capital to such investments, and investments funds are awash in vast amounts of uncommitted capital.

Windom Ratchford, Owner and Creative Director of Creative Gold Media, was kind enough to video tape this fascinating discussion, which you can see above. Don’t miss this exciting story!

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