Private equity says 'hola' to Latino firms

— -- As a boy on the rough streets of Washington Heights, N.Y., 46-year-old Marcos Rodriguez saw his father toil as a hotel waiter to raise his kids. His dad, once a successful Havana businessman, had lost his land to the Cuban regime.

Vowing to honor his parents' hard work, Rodriguez earned an MBA from the University of Pennsylvania's Wharton School, worked for GE in Mexico, then became a successful financier.

"One great lesson I learned from my parents," Rodriguez says, "is that no one can take away what's in your heart and in your head."

Reflecting his father's entrepreneurial spirit, Rodriguez left buyout firm Joseph Littlejohn & Levy 11 years ago to launch Palladium Equity Partners, a fast-growing investment firm in New York with $1 billion invested in Latino-related small and midsize companies.

"We're bringing Wall Street to the barrio," Rodriguez says.

Palladium and a growing number of private-equity firms invest in what bankers call the "U.S. emerging domestic market," or ethnic and urban businesses. More than 55 such firms manage $10 billion in capital, according to the National Association of Investment Companies.

Competition increasing

Now, large investors and Fortune 500 companies are vying for Hispanic, African-American and Asian-American consumers. Palladium especially is eyeing the 40 million Latinos who are 15% of the U.S. population. Market-research firm HispanTelligence projects U.S. Latino purchasing power will hit $1 trillion by 2010.

Boasting investment professionals with global experience, Palladium invests in Hispanic-owned businesses that cater to Hispanic consumers in banking, retail, media, health care and business services.

"Palladium is unique because we have a horizontal focus, the ability to cross the spectrum of many industries," says Gary Nusbaum, a Palladium partner who has worked in Latin America, Asia and Europe. "The U.S. Hispanic market really does affect every industry."

Palladium's portfolio of companies includes: