Four ex-American Capital professionals have teamed up to launch a new mezzanine fund.
For its part, Bethesda, Md.-based 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.
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 website. 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 fund-raising toward an undisclosed amount one month ago and has already held a first close on 65% to 70% of its target, according to a source familiar with the firm.
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 Co. license 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, which is led by President Obama nominee Karen Mills, former president of private equity firm MMP Group and co-founder of New York-based venture firm Solera Capital. —Erin Griffith