Chatham Capital To Raise $400M For Mezz

Just because fundraising season is back on for some of the biggest names in private equity, it doesn’t mean mezz lenders are getting left out in the cold in these heady times. Chatham Capital Partners Inc., the Georgia-based mezzanine lender, will raise up to $400 million for its next fund, Chatham Capital Partners IV LP, an individual familiar with its plans told peHub, a sister Web site to Buyouts.

ham makes investments of up to $60 million via subordinated debt in companies with revenues of at least $10 million and earnings of $2 million that are not in real estate or early stages of development.

The move comes less than two years after Chatham reportedly sought to raise between $150 million and $300 million, which the Atlanta Business Chronicle reported in August 2009. The report quoted its founder Brian Reynolds, who said Chatham’s first three funds returned more than 15 percent annually to investors.

According to Chatham’s Web site, the mezz lender is an “$800 million mezzanine fund.” Its third fund was $350 million, the Atlanta Business Chronicle reported. Chatham does not publish specifics on its funds at its website.

The mezz lender concentrates the bulk of its investments near its home base in Atlanta, with many deals taking place in the Southeast. Since 2003, it has committed hundreds of millions of dollars to deals involving health care companies and food producers, among other industries. Companies Chatham has invested in include: Palm Beach Tan, Preferred Medical Claim Solutions, Five Star Food Service and Sun Link Health Systems.

Chatham did not comment for this story.

Jonathan Marino is editor/columnist at peHub, a sister Web site to Buyouts.