New private-equity firm targets revenue growth over cost-cutting playbook
Aldaron, a private-equity startup co-founded by private-markets and engineering veterans from Palantir and the Carlyle Group, closed its debut fund with $885 million in commitments to apply artificial intelligence at the businesses it acquires, the firm’s founders told The Wall Street Journal. The closing brings Aldaron’s total assets under management to close to $1 billion.
The firm made its first acquisition in March, buying a majority stake in Oak Point Partners, which purchases what it calls remnant assets from companies, often in the course of bankruptcies. Aldaron deployed AI tools to speed Oak Point’s research and data analysis, and the tools now identify 10 to 12 high-potential opportunities a week that Oak Point can convert into cash, up from one or two previously, Oak Point Chief Executive Eric Linn said.
Linn said Oak Point’s revenue could rise as much as fivefold over the next four to five years under Aldaron’s ownership. Oak Point’s workforce has grown 20% to 75 employees since March, with most new hires focused on deal sourcing and technology development, and the company aims to reach 100 employees within a year, according to Linn.
The three co-founders bring deep industry and engineering experience to the strategy. Grewal co-founded Palantir’s commercial business, where he led a team of more than 600 engineers and helped set up its enterprise data-management platform. Mendez previously worked on Carlyle’s U.S. technology buyouts investment team. Will Oberndorf led the private-markets practice at a family office founded by his father Bill Oberndorf, an investor and political donor.
Aldaron targets acquisitions of U.S. companies with enterprise values of $200 million to $1 billion in healthcare, industrial, and financial services, Mendez said. Aldaron’s investments are aimed at increasing head count and improving operations at portfolio companies by accelerating the adoption of AI, and the firm avoids businesses whose strategy involves laying people off, according to Mendez.
Half of Aldaron’s 12-person staff, based in New York and San Francisco, are engineers who build systems alongside managers. Some of the engineers, including Grewal, will sit on the firm’s investment committees and on the boards of its portfolio companies, Aldaron executives said.
“If you want to own the whole problem and actually do the transformation, you can’t come in with just a limited skill set of being able to just deploy AI,” Grewal said.
The strategy places Aldaron among a new breed of firms centering their entire business models around applying new technologies at portfolio companies. Larger private-equity firms including Blackstone and Hellman & Friedman have AI-related initiatives, including a joint venture in which engineers embed in portfolio companies, the Journal reported. In the same week, the recently launched firm Ithaca Holdings announced a deal to acquire dating-app company Bumble with the goal of applying advanced technologies.
Aldaron’s fundraising comes amid an industrywide slowdown in private-capital fundraising, with investors becoming increasingly selective. Aldaron’s name is a word used by author J.R.R. Tolkien that loosely translates to “tree” and, to the firm’s founders, reflects growth.