Sard loses clients amid shakeup

San Francisco-based Golden Gate Capital is close to acquiring a 40 percent stake in US public relations firm Sard Verbinnen & Company, according to a report from The New York Times. However, because of negotiations tied to the investment, several employees that had significant books of business representing alternative investment firms have left the company.

Jonathan Gasthalter, a managing director in Sard’s New York office, has left to start his own company called Gasthalter & Company. He has taken with him number of junior employees, including Nathaniel Garnick, Amanda Klein and Kevin FtitzGerald, who all worked with private equity and debt firms.

Och-Ziff Capital Management, one of the oldest hedge funds that has recently been expanding into private credit, will be represented by Gasthalter’s new company. MGG Investment Group, the new lending firm launched with capital from Frank McCourt, is also walking with Gasthalter.

However, many of the large private equity and debt firms that Sard represents are staying with the firm. These include Oaktree Capital Management, Angelo, Gordon & Co. and Providence Equity Partners (including its private debt arm, Benefit Street Partners), as well as Thomas H. Lee Partners and its credit arm THL Credit. Cowen & Company, which has an investment banking and alternative asset management business and has recently been trying to get into the private debt space, will also stay with Sard.

Other clients the firm represents in the private equity and debt space include Anchorage Capital, CIFC, Glendon Capital Management, Owl Rock Capital Partners, Solace Capital and TICC Capital Corp. It is not yet clear which PR company these managers will choose to represent them.

The Golden Gate deal would involve partners selling 40 percent of their shares to the private equity firm. The new contracts also include non-compete clauses, according to The New York Times report.

It is reported that 24 out of 27 partners agreed to the new deal. However, Gasthalter was one of the three partners that did not buy in and left the firm. The others that declined were Dan Gagnier, who is also starting his own PR company, and Renée Soto, who is expected to continue consulting for Valeant, the troubled pharmaceutical company he represents.

The departures reportedly delayed an announcement of Golden Gate’s stake purchase. George Sard, one of the firm’s two co-founders, has said that Gasthalter’s departure might actually put the firm in a better position to work with larger clients in business and politics who would prefer not to be associated with a PR company that works with so many hedge funds, according to a report from The Times.

The news follows the firm’s appointment of former Blackstone PR Peter Rose as vice chairman. Rose retired from his former role in January.

Sard declined comment on the news and Gasthalter did not respond to a request for comment.