Belvedere Capital Partners LLC, a bank-focused private-equity fund, has raised far less than expected for its most recent fund.

The fund had originally targeted $500 million. It held a $44 million closing in 2008 and is no longer in the market, said two people familiar with the situation.

The fund, which was named Belvedere Capital Fund III LP, has been rebranded Belvedere Capital Fund II A LP, as an annex to a predecessor partnership, said one of the people.

Meanwhile, managing partner Alison Davis has stepped down from day-to-day operations and will not be involved in deploying the new fund, said those familiar with the situation.

Belvedere Chairman Richard Decker was unavailable to comment.

JoAnne Lauer, the vice president of limited partner relations and regulatory affairs, did not return messages seeking comment.

Belvedere, which is based in San Francisco, first considered raising a new fund in 2007.

It planned to collect $100 million for an annex fund to Belvedere Capital Fund II LP, a $150 million vehicle closed in 2006, said one person familiar with the matter.

The plan changed in 2008, with Belvedere deciding to raise a stand-alone fund with a $500 million target, this person said. "They thought there would be opportunities post-Lehman to buy distressed banks."

But the fund came to market at about the same time as other bank-focused funds raised by specialist firms including Castle Creek Capital LLC and generalists such as Carlyle Group and TPG Capital LP.

Also competing for limited-partner dollars were blind pools of capital being raised by such firms as Sageview Capital LP and Blackstone Group LP.

"People had options, and if you show cracks in your portfolios, they would turn elsewhere," said one person familiar with the situation.

One such crack in Fund II's portfolio was the bank holding company SoCal Bancorp, which trades on the Pink Sheets.

SoCal reported loan losses from its primary subsidiary, the $304 million-asset Professional Business Bank, and it was in default on a note after failing to raise enough capital to satisfy regulatory requirements.

Belvedere had to inject $12.6 million in fresh equity directly into Professional Business Bank to keep it alive, leaving SoCal's fate as a going concern unclear.

Belvedere has invested at least $37 million in SoCal from Fund II. The $12.6 million in fresh capital in Professional Business Bank also came from Fund II.

Another major change affecting the private-equity fund was the decision to step back by Davis, 48, a senior partner who played a key role in deploying Fund II.

As Decker reached his late 60s and early 70s, Davis took on more day-to-day responsibilities, according to a person familiar with the firm.

It could not be determined why Davis decided to scale back; she did not return a message seeking comment.

Belvedere's backers include Bank of America Corp., Cargill Inc., Hillman Co., Miami Corp., Northwestern Mutual Life Insurance Co., Old Republic Insurance Corp., Phoenix Life Insurance Co., Royal Bank of Canada, Scotiabank Group and SunTrust Equity Partners.

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