Irving Place Capital is in talks with Coller Capital and the Abu Dhabi Investment Authority to restructure a $2.7 billion fund raised in 2006, according to a source familiar with the situation.

Should it close, the deal would bring in money for new investments by the John Howard-led private equity firm while giving existing investors an opportunity to cash out.

As envisioned, the deal would leave Irving Place with about $300 million to invest for the next 18 to 36 months, a source said. That means the company, which typically aims to invest $100 million in deals, might have to bring in more partners in deals or write smaller checks.

Irving Place has been active in the retail space, with Rag & Bone, New York & Co. and women’s apparel brand Cabi among its current investments. Past bets in fashion include Stuart Weitzman, Seven For All Mankind, Aéropostale Inc. and Dots, which stumbled and went bankrupt last year.

Howard, who is chief executive officer of the firm, has also expressed interest in buying American Apparel Inc. for as much as $245 million, pending due diligence. But that process is said to have been moving very slowly, and the vertically integrated company is still working to find its footing under new management.

One source said the company, when it was still known as Bear Stearns Merchant Banking, made a series of poor investments in 2006 and 2007, pumping money into financial services, natural resources and health care companies just before the financial crisis.

Irving Place has invested more than $1 billion since it was spun out on its own in 2008 and has returned all that capital to investors already, according to a source.

Howard’s office said on Wednesday that he was unreachable.

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