Helminski closes transformative $100M Michigan Opportunity Fund for Auxo

Helminski closes transformative $100M Michigan Opportunity Fund for Auxo

Jeff Helminski of Auxo Investment Partners was sitting in his downtown Grand Rapids office in May 2020, during the early days of the pandemic, when his phone rang with a cold call from a prospective investment partner.  

Little did Helminski know when he answered the call that the conversation he was about to have would ultimately lead to a transformative moment for the private equity firm Auxo. 

The outreach came from Mike Cazer, the CEO of Continuum Ventures LLC, which serves as the family office for Doug and Maria DeVos. Cazer, the former COO and CFO at Amway, had just completed an arduous vetting process to identify private equity funds to help the family build out an investment vehicle targeting Michigan-based companies. 

 

DEALMAKER OF THE YEAR 

Investor

Jeff Helminski

Managing Partner, Auxo Investment Partners

  • Formed in 2016, Auxo Investment Partners is a Grand Rapids-based private equity firm that specializes in investing in and growing founder- and family-owned industrial, manufacturing and business services companies, often in partnership with existing owners. The firm also takes a long-term approach to its investments.

“Finding the right partner or fund was going to be very difficult because we wanted to get really behind it and put the family’s name around it,” Cazer said. “We wanted to be very selective about that in terms of their reputation and how they operate.

“We wanted a firm that matched our values.”

The search led Cazer to Grand Rapids-based Auxo Investment Partners, which Helminski co-founded in 2016. The family’s attention was drawn by Auxo’s long-term approach to investing compared to many private equity firms, as well as its work to “get under the hood, work with the companies that they invested in and add real operational value,” Cazer said. 

In the call, Cazer described the DeVos family’s vision for a Michigan-backed fund that invested in Michigan-based companies. The family had capital and relationships with other successful business owners and families that were likely partners, but they lacked the team to do the due diligence and direct investing in the target companies. 

“As they described their vision for it and how they’d want to execute it and their values, it aligned perfectly with what Auxo was already doing, who we were, what we were all about,” Helminski said. 

After about six or seven months of due diligence in which Cazer interviewed most of Auxo’s employees and the CEOs of several portfolio companies to ensure the firm’s culture “wasn’t just nice words on a page,” both sides agreed to move forward with fundraising for the Michigan Opportunity Fund, which started in earnest in early 2021. 

By October 2022, Helminski and his team closed fundraising at its hard cap of $100 million for the blind-pool private equity fund. The achievement earned Helminski the 2023 MiBiz Dealmaker of the Year Award in the investor category, only the second two-time individual winner (2019) in the 10-year history of the program. Helminski, who also was a finalist in 2018, is the only two-time winner in the investor category.

“The key is getting in front of people to tell your story,” Helminski said. “Doug and some of the other early investors in the fund were terrifically supportive in helping us connect with people they knew who otherwise would have been difficult for us to get an audience with. … The thesis made sense to people, and then Doug and Maria and other investors helping us with those introductions, that was really the recipe for success.”

A significant portion of the fundraising took place during the pandemic, which limited the ability to meet face-to-face with potential investors. Once the pandemic started to ease, the Russian invasion of Ukraine heated up and the economy began to be battered by high inflation and “a stock market decline of a proportion that many people haven’t seen in their lifetimes,” Helminski said. 

“Through all of that, we were able to still raise this relatively unique fund. It was a challenge, for sure,” he added. 

In addition to Doug and Maria DeVos’ family, investors in the fund include members of the Penske, Jandernoa, Bissell, Cotton, Dauch, Hagerman, Kennedy families. 

Helminski cites Mike Jandernoa and John Meilner’s Bridge Street Capital Partners in the early 2000s as a precursor of sorts to the Michigan Opportunity Fund and the idea of raising an investment fund from Michigan-based families.

“The path that guys like John cut in the wilderness of this kind of investing in the state paved the way for people to be open to it,” Helminski said, noting how far private equity investing has come in the state in recent years.

While the Michigan Opportunity Fund’s thesis hinges on growing strong companies and communities in the state, that focus does not cloud the managers’ or investors’ expectations for strong returns.

“The things you do to grow a business, to professionalize a business, to invest in people, to increase employment, all the things that make us successful as a company make the companies we invest in successful,” Helminski said. “Those are the things that lead to both great returns and great outcomes in the community with job growth, with making companies stickier, so that if the day comes when we no longer own them, they’re still rooted in this community. They’ll have longevity, and they’ll stay here long term.”

As Cazer describes it: “This isn’t charity. Our philosophy here at Continuum, along with Doug and Maria’s philosophy, is that good business creates sound economics, which allows you to be generous with the people in the community.”

In addition to closing the Michigan Opportunity Fund, Auxo also completed four add-on deals last year. Acquisitions included: 

  • Breyden Products Inc., a Columbia City, Ind.-based manufacturer of braided lacing tapes, twines, cords and other lacing and tying materials used to insulate and hold electrical components in place. 
  • Saylor Technical Products, a Grand Rapids, Ohio-based manufacturer of flexible, non-metallic, wire and hose protection products and specialty cords and tapes. Both Saylor and Breyden are being integrated into the Precision Products Group platform, which Auxo acquired in 2021.
  • Morgan-Royce Industries, a Fremont, Calif.-based manufacturer of cable assemblies and box builds that specializes in high-mix, low-volume work for the semiconductor and microchip manufacturing industries.
  • Tack Electronics Inc., a Grand Rapids, Michigan-based manufacturer of wire harnesses, cable assemblies and other electronics products. The deal for Tack was selected as the 2023 M&A Deal of the Year in the manufacturing category. (See page 21.)

Morgan-Royce Industries and Tack Electronics fit into Auxo’s wire harness platform, which also includes Golden State Assembly. 

“We think this has the potential to be a very, very sizable platform,” Helminski said. “If you think about the electrification of just about everything here in our world as we move forward, that’s going to be a demand driver for the type of products that these companies produce.”

Along with the growth of the firm, Auxo also moved into 38 Commerce in downtown Grand Rapids, doubling the size of its office. 

The combination of meeting the fundraising target for the Michigan Opportunity Fund, closing the add-on deals, hiring additional staff and moving offices marked what Helminski called a “transformative year for Auxo” that will accelerate the trajectory of the firm for years to come.

“The ultimate measure of someone that does what we do for a living is: Did you produce returns that your investors are excited about? And then if you did, did you do it in a way that they’re proud to be associated with you? Did they have a good experience with you?” Helminski said. “If those things are true, you’ll have a long career in this industry. If any one of them is not, it’ll be a struggle.”