In an impressive debut on the Hispanic Business 500, private-equity firm Palladium Equity Partners LLC has vaulted to the No. 5 spot, with $844 million in revenue last year, and set its sights on more.
Based in New York, the five-partner Palladium appears on this year's list by virtue of an influx of Hispanic capital that occurred when David Perez joined the firm in 2003, increasing Hispanic ownership to 50 percent.
The company was founded in 1997 by Marcos A. Rodriguez, who emigrated from Cuba to the United States when he was 6 years old.
"I think it's the great American dream to learn your craft and go out and hang out a shingle," says Mr. Rodriguez, 42, explaining why he left a successful partnership with Joseph Littlejohn & Levy to start Palladium.
Mr. Perez, 36, is a second cousin of Mr. Rodriguez. He grew up in Cuba, received an undergraduate degree in East Germany and earned master's degrees in the United States. He spent seven years at General Atlantic Partners, a private-equity firm with $5 billion in capital, before joining Palladium. "I decided to join Marcos here because I wanted to be a more significant owner of a smaller, fast-growing firm," he says.
Palladium seeks to invest in companies that are in transition or operating below their full potential. Employing former corporate executives who are experts in various industries, Palladium identifies promising companies, buys them, improves their profitability, and then sells them at a profit.
Since its founding, Palladium has purchased nine companies and sold three. Its $844 million in revenues is the aggregate of the six companies it now owns. "What we do after we make an investment is we look to focus on five areas - strategic development, operations, finances, corporate development, and human resources," says Mr. Perez.
Mr. Rodriguez says Palladium also seeks to invest in companies that will benefit from the growing Hispanic population. Wise Foods Inc., he says, is a good example of a company poised to capitalize on the growing Hispanic demographic. According to Mr. Rodriguez, Wise Foods has a large distribution area, but the bulk of its revenues and profits come from New York and Miami, which both have large Hispanic populations and where the company sells its products in bodegas. Wise Foods also works with other food companies that seek to capitalize on its bodega network.
Mr. Rodriguez believes a major trend in the finance industry is the growth of, and investment in, companies that serve the fast-growing Hispanic population. "We see the next 10 years as having tremendous benefit in the growth of this demographic," he says.
