Mill Road Launches Fund to Unlock Value in Small Caps Through Governance & Diversity Improvements
Investment firm Mill Road Capital announced plans to launch the Mill Road Progressive Governance Fund (MRPG), aiming to generate strong returns by taking large equity positions in small-cap companies and appointing board members capable of improving the culture and character of the boards in those target companies.
The company also announced that former Jamba Juice CEO James D. White has joined the firm as a Managing Director and Head of Board Governance and Diversity Initiatives.
Mill Road Capital invests in small and micro-cap companies, applying a private equity skillset to unlock value in those companies. The new fund, initially targeted at $500 million, aims to improve the functioning of boards by adding directors with the ability to drive long-term value creation, while also enhancing the culture of boards by bringing in more diverse viewpoints. Mill Road has committed that at least 50% of its director nominees will be women or people of color.
Rather than taking either a passive or adversarial approach, MRPG will be a ‘Sponsoring Investor’ fund, that will seek board seats and constructively engage with management to create economic and social value for shareholders.
Thomas Lynch, Senior Managing Director and Founder of Mill Road, said:
“Our Sponsoring Investor fund aims to change the way public companies are governed in America. With passive index funds becoming the largest voting bloc in public equities, shareholders now more than ever need a skilled, engaged, and aligned partner on the board to ensure the highest standards of operational and social governance are upheld. The Progressive Governance Fund was created to be that partner.”
White was with Jamba Juice from 2008 to 2016, serving as Chairman, President and CEO. He joins Mill Road with 20 years of board experience on over a dozen boards. White is the co-founder and chairman of the Director’s Academy, a not-for-profit organization developed to identify, train and place the next generation of diverse directors, and was recently appointed to the Board of Directors of Chief Executives for Corporate Purpose, which aims to empower companies to drive long-term business success through positive social impact.
White said:
“Study after study has shown that racial and ethnic diversity in both the executive suite and the boardroom not only enhances company morale from top to bottom, but also improves financial performance, encourages innovation, and brings in new perspectives that lead to new opportunities. Our mission at Mill Road is to understand the role of diversity, encourage it in all of our investments, and serve as the tip of the spear as corporate America takes this bold step forward into being more inclusive at the highest levels. I am very proud to be a part of this movement and am looking forward to helping Mill Road invest in and support companies with progressive social values and products.”