ACAS Alums Form New Mezz Fund

Firm: Boathouse Capital

Fund: Boathouse Capital LP

A group of ex-American Capital professionals have teamed up to launch a new mezzanine fund.

Based in Wayne, Pa., Boathouse Capital is yet another independent mid-market lender to set up shop in the aftermath of industry-wide layoffs. CastleGuard Partners launched in early July from the ashes of Freeport Financial, which earlier this year laid off all but four of its employees.

For its part, American Capital has undergone several rounds of layoffs, beginning as early as April 2008. Last year Kenneth Jones, Stephen Gord, William Dyer and Chong Moua of American Capital’s Philadelphia office joined forces to launch Boathouse Capital, which opened its doors in the fall of 2008. The shop, which has yet to complete a deal, plans to make mezzanine debt and non-control equity investments “in top quality, later-stage businesses” according to a statement on its Web site. Its strategy is to target companies with EBITDA of $2 million or more and revenue of at least $10 million on an annual basis.

The firm began fundraising toward an undisclosed amount one month ago and has already held a first close on 65 percent to 70 percent of its target, a source said. The fund’s target is unclear, but the shop is planning to make 15 investments of between $5 million and $15 million each with the fund. That implies a target range of $75 million to $225 million.

Boathouse Capital has applied for a Small Business Investment Company, or SBIC, license in order to leverage the capital it raises. Effective July 10, as part of the passage of the American Recovery and Reinvestment Act, funding levels for the SBIC program were increased to up to three times the private capital raised by the SBIC with a maximum of $150 million for a single SBIC and up to $225 million for multiple SBICs under common control. The SBIC program is administered by the Small Business Administration.